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Virginia Senate allows state banks to offer crypto custodian services

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Crypto assets custody services have been approved in Virginia, United States. Recently, the senate unanimously approved a bill amendment request that allows traditional banks operating in the Commonwealth of the city to offer cryptocurrency custody services. Notably, the bill was introduced earlier this year and has been seeking an amendment since then. And now as the bill is passed it will allow eligible mainstream banks to offer cryptocurrency custody services.

Banks should follow 26 protocols to offer custodian services

Delegate Christopher T. Head had first introduced the bill in the US senate as a House Bill No. 263, in January. He further highlighted that a bank may offer its clients with crypto assets custody services as long as the bank has 26 adequate protocols in place. These protocols will effectively manage risks and comply with applicable laws.

Crypto custody bill received 39-0 vote

In the US senate, the bill introduced by Delegate Christopher T. Head passed with a whopping 39-0 vote. However, currently it is waiting to be signed into law by the Governor  of Virginia, Glenn Youngkin.

However, banks intending to offer such services will have to adhere to three specific requirements mentioned in the bill. These requirements include implementation of effective risk management systems, possess adequate insurance coverage, and launch an oversight program to address risks associated with virtual currencies.

Furthermore, the senate requires the banks to retain direct control of their public and private keys associated with their crypto. The bill underscored that acting in a fiduciary capacity, the banks shall require clients to transfer their assets to the control of the bank by creating new private keys that will be held with the bank.

US states witnesses legislation

Other states like Wyoming have also recently seen an introduction of legislation for a government issued fiat-pegged stablecoin. It is worth noting that just the previous month, the House Committee on Financial Services had a discussion regarding stablecoins regulations and crypto should be addressed at the state or federal level.

Following the discussion, North Carolina Representative and ranking committee member Patrick McHenry asked to consider state-level regulatory frameworks in lieu of a comprehensive federal law on stable cryptocurrencies.

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