Wyoming's New Blockchain Laws Are Receiving World Wide Attention
While the Wyoming legislature was busy fighting about private schools, the budget and a few tax issues, it also passed legislation that continues to make the state the place to be for Blockchain technology.
Blockchain is a digital ledger that can be accessed instantly. It's most commonly used in the financial world where digital money can be transferred back and forth without delay. But Blockchain can be used for other things as well.
This session the legislature passed a law making Wyoming the first state to recognize cryptocurrencies, virtual securities and other digital assets and also allowed financial depositaries, which are like banks to come to the state and store the digital assets.
Caitlin Long is a Wyoming native with a long history on Wall Street and is the co-chair of Wyoming Blockchain coalition.
"This is one where being first really does matter, because we could grab a first mover advantage and it's clearly starting to play out that way.
Long added that it's hard to overstate the interest in what Wyoming is doing.
"I've had thousands of inquires personally on social media just in the past two weeks. When I published a piece on Forbes.com two days ago that summarizes the importance of the legislation, within 24 hours it had 22-thousand views," Long said.
That's not a surprise to Laramie Senator Chris Rothfuss, who said the worldwide interest has been high ever since Wyoming embarked on this effort.
"Of all the years I've been in the legislature, this is the first time I've been in committee where people fly from all over the world to participate. Where we have billionaires in the back of the room to provide testimony on what it is we are working on, where we get unsolicited advice from law firms in the east coast that work in securities," Rothfuss said.
Recognizing digital assets was huge for Wyoming, but he said the so-called digital banks part of the legislation was equally big. That's because specialized banks are needed to store digital assets.
"That allows these innovative and kind of advanced startups to be able to bank and pay their paychecks," Rothfuss said.
Already several of these repositories are looking to set up shop in Wyoming. Sheridan Representative Cyrus Western said the need is great and will benefit the state.
"Goldman Sachs issued a whitepaper back last summer saying there's about $110 trillion worth of securities floating around on the global market and in the next five years, ten percent of that will migrate to Blockchain. So we are talking about $10 trillion that needs to be stored somewhere," Western said.
He said the goal is to bring some of that money to Wyoming. He added that others are paying attention, such as the main exchange in the digital currency world.
"The founder and CEO of Kraken, which is one of the big Bitcoin exchanges, I think they have six or seven million users? You know they were here because they are strongly considering moving their operations to Wyoming. I think this is a company with like 700 employees. When you have people like that knocking on your door, something's going right," Western said.
Sundance Representative Tyler Lindholm said helping legislators understand the importance of this has taken some time and education. But he noted that businesses get it.
"We had a business last year that got ahold of us after our first round of legislation and let us know that their headquarters were moving from New York City to Jackson. I don't know if that's ever happened?"
Lindholm said the Blockchain opportunities aren't limited to finance. There is Beefchain where Wyoming cattle and beef products can be tracked globally. He noted that WalMart used Blockchain during the romaine lettuce scare. At first, it took 7 days to figure out where the produce came from, but after developing a Blockchain technology the information is now available immediately.
"So 2.2 seconds they are able to directly track where that food comes from. So on a foodborne illness aspect, the technology is wonderful. On a regulatory aspect…as good as it can be," said Lindholm.
Rothfuss said entrepreneurs are flowing into the state developing all kinds of technologies.
"We are already seeing innovative technologies being explored in the state of Wyoming and in effect being beta-tested here so that they can develop a product for the rest of the country."
Rothfuss noted that this is happening with little spending from the state.
"The Blockchain task force work has probably done more to diversify the economy than the Endow initiative," said Rothfuss.