Virginia Senate has authorised state banks to provide crypto custody services
In January 2022, Delegate Christopher T. Head submitted the measure (House Bill No. 263), requesting an amendment to enable qualifying institutions to provide crypto custody services.
The United States Senate of Virginia overwhelmingly accepted a bill amendment request allowing conventional banks operating in the Commonwealth of Virginia to offer virtual currency custody services.
In January 2022, Delegate Christopher T. Head presented the measure (House Bill No. 263), requesting an amendment to enable qualifying institutions to provide crypto custody services:
“A bank may offer virtual currency custody services to its clients as long as the bank has in place 26 appropriate standards for risk management and compliance with relevant regulations.”
The measure cleared the Senate with a resounding 39-0 majority and is now awaiting Governor Glenn Youngkin’s signature. Banks that want to provide this service to their customers must comply with three particular conditions outlined in the bill: they must develop appropriate risk management systems, maintain enough insurance coverage, and establish an oversight programme to handle cryptocurrency-related concerns.
The Senate, on the other hand, would compel banks’ clients to keep direct management of their virtual currency’s public and private keys, adding:
“As a fiduciary, the bank must compel consumers to transfer their virtual currency to the bank’s management by generating new private keys for the bank’s use.”
Other states, like Wyoming, have recently introduced legislation to create a state-issued stablecoin. Recently, the House Committee on Financial Services debated whether stablecoins and digital assets should be regulated at the state or federal level.
In this context, North Carolina Representative and ranking committee member Patrick McHenry requested that the committee investigate state-level regulatory frameworks in place of a complete federal stablecoin legislation.
Jean Nellie Liang testifies before the House Committee on Financial Services on February 8. According to Jean Nellie Liang, the Department of Treasury’s undersecretary for domestic finance, US dollar-pegged stablecoin issuers — both state and federally licenced banks — should be subjected to the same requirements as insured depository institutions.