Nebraska becomes the second American state to allow banks to hold cryptocurrencies

As per the news agency AP news report, Nebraska state has passed a law on 26th May 2021 that authorizes state-licensed banks to hold cryptocurrencies. Nebraska becomes the second American state to do so after Wyoming.

During 2018–2020, the state of Wyoming has passed 13 laws, so-called “blockchain bills”, that have transformed Wyoming into the most “crypto-friendly” state. It has become famous as “a new Delaware, crypto-friendly state, blockchain hub”.

This move will make Nebraska the second state to create a formal charter for “cryptobanks,” allowing them to help facilitate transactions. The bill aims to turn Nebraska into a major hub for digital asset companies and those interested in innovative new financial products and services based on blockchain technology. Interestingly, the banking industry worked extensively with lawmakers on the bill before it advanced out of committee.

Mike Flood who is the founder and CEO of Flood Communications and a lawyer from Norfolk, Nebraska, and serves in the Nebraska Legislature said he introduced the bill after talking with an entrepreneur friend who recently decided to move his cryptocurrency company to Wyoming. Flood said Nebraska has a chance to become an early embracer of cryptocurrencies with the measure, which could help bring high-paying technology and finance jobs to the state.

“This is a once in a lifetime opportunity not only for my district but the state of Nebraska”

Mike Flood, Member Nebraska Legislature

Financial service companies like PayPal, have started offering services that allow customers to buy, sell and transfer cryptocurrencies. This bill would allow state-chartered banks to offer similar kinds of services by creating a separate division within their companies.

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Many analysts praised the initiative while some lawmakers questioned the bill and expressed concern whether it was smart for the state to embrace cryptocurrencies and said they were still unclear about everything the measure would do. Some others supported the general idea but opposed parts of the bill that would exclude credit unions from participating.