A bipartisan group of Wyoming lawmakers has introduced a bill that would change the way the state deals with digital currencies such as Bitcoin. The bill seeks to make it easier to deal with cryptocurrencies in the state.
House Bill 26 would amend the new bill to define digital currency as a permissive investment. This means that bitcoin and other digital currencies would be treated the same as major currencies like US dollars and Euros when dealing with cash transfers.
At present, businesses that deal with monetary transactions are required to have the same amount of US dollars and bitcoins in their reserves when conducting business in bitcoins. Because of this law, big digital currency companies like Coinbase have been forced to leave the state.
The new law would ease reserve requirements on businesses that accept bitcoins as payment in Wyoming. Those businesses will only be required to have bitcoins in reserve, making it easier to run any business in the state. Rep. Tyler Lindholm, the main sponsor of this bill, said HB 26 makes a lot of sense, given the fact that that the current regulation has already driven most bitcoin-friendly companies out of the state.
Lindholm said he understands that the current requirement makes it very unpleasant for digital currency-based business to do business in the state of Wyoming. He further said that his main reason for introducing this bill is to entice digital currency-based businesses to the state.
The best way to explain what the new act would do is to consider the current law for transferring cash through Western Union. If you send $100 via Western Union, the money transmitter act requires Western Union to have the same amount of cash in reserves as a backup if they lose the cash somewhere along the way.
If you want to make purchases using PayPal, and you prefer paying with bitcoin instead of dollars, the current law requires PayPal to have the corresponding amount of bitcoin and dollars in reserves. For instance, if you shop $500 worth of product in bitcoin using PayPal, the company will be required to have $1000 in reserves–$500 in bitcoin and $500 in dollars.
Bitcoin is currently considered to be the world’s most popular digital currency, but there are hundreds of such currencies for trade online. Lindholm sees bitcoin as a hybrid between the US dollar and precious metals assets like gold, silver or platinum. Most analysts believe the new bill would level the playing field.
State Senator Chris Rothfuss says bitcoin and other digital currencies should be treated the same as the dollar or a Euro, or other major currencies. He added that the mathematics behind bitcoin is fascinating and if the law is passed, the state will experience an increase in currency-based companies.
The value of bitcoin has been swinging madly, but the scale of its use has increased substantially over the last few years. For that reason, Rothfuss and other co-sponsors of the bill believe bitcoins and other digital currencies deserve an equal treatment.
Bitcoin is a form of cryptocurrency that base its value on trust rather than any specific backing commodity. Unlike cash, bitcoins are not printed. They are mined by people running computers all across the world, using software that can solve the riddle.
Bitcoins can be used to purchase just about anything online today. In that sense, they are like paper currencies such as dollars, euros, or yen, which are transacted digitally as well. The one thing that makes it different, however, is that it’s decentralized. No institution controls the bitcoin network and this puts some people at ease.
The mechanics behind cryptocurrencies can be hard to explain to ordinary people. As a result, a number of digital currency bills have been shot down in other states. While Lindholm’s bill makes a good business sense, the nature of bitcoin may make it difficult for Lindholm to convince his fellow lawmakers who don’t know what bitcoins are and how they work. However, he is hopeful that he will get the two-thirds majority required for the bill to become law.