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Nebraska Legislature Approves Framework for Digital Asset Banks

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  • The state legislature of Nebraska passes a bill to allow the creation of digital asset banks
  • The legislation would allow existing banks to open a crypto division
  • Bill passed after 18 weeks of negotiation
  • Digital banks permitted to accept deposits in fiat but not allowed to lend in it

Bill 649 for Crypto Banks

The unicameral state legislature of Nebraska passed bill 649 that would create a state bank charter for digital asset depository institutions. It is awaiting approval from the state governor, Pete Rickett.

This bill would give consumers and institutions a place to custody their digital assets signalling a big step forward in the crypto sector.

The banks thus created would be similar to Wyoming’s special purpose depository institutions like Avanti Financial and Kraken Financial.

This bill would even allow the existing state-chartered banks of Nebraska to open crypto banking divisions.

Long Battle between State Legislature and Banking Divisions

According to Senator Matt Williams, who is also the chairman of the state legislature’s Banking, Commerce and Insurance Committee, there were 18 weeks of constant negotiations between the banking industry and the digital asset deposit institutions’ proponents, majorly over the usage of the word “bank”.

It had been agreed that special purpose depository institutions of Wyoming could use the work ‘bank’ without any qualifiers, but the crypto-related institutions under the Bill 649 would have to use ‘digital asset’ before the word ‘bank’ every time they market themselves to the customers.

Lending and Depositing by Nebraska’s Crypto Banks

Like Wyoming’s SPDIs, Nebraska’s digital asset banks would not be able to lend in fiat, and each of them will have to hold 100% of its assets in reserve.

Unlike the SPDIs, the newly formed digital banks of Nebraska cannot accept fiat deposits.

These digital banks would be required to have a minimum capital reserve requirement of $10 million and would be allowed to apply for access to the Federal Reserve’s payment system.

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