Senate of Virginia approves for banks to offer crypto custody solutions

The Senate of Virginia in the United States universally agreed to approve a bill amendment proposal that now authorizes traditional banks to offer digital currency or crypto custody solutions in the Commonwealth of Virginia.

Delegate Christopher T. Head submitted the bill (House Bill No. 263) in January this year, seeking an amendment that would allow authorized banks to offer crypto custody services:

“A bank may provide its customers with virtual currency custody services so long as the bank has 26 adequate protocols in place to effectively manage risks and comply with applicable laws,” the statement says.

Requirements for crypto custody service offering banks

The proposed bill passed the Senate with a resounding 39-0 majority and is now awaiting Governor Glenn Youngkin’s signing. Banks that want to offer this service to their customers must meet three specific requirements outlined in the bill: they must develop effective risk management processes, have insurance coverage, and start a crypto risk oversight plan.

The Senate, on the other hand, will demand that bank customers keep direct management of their digital currency’s public and private keys, adding:

“Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank.”

Stablecoin Regulation tights

Other jurisdictions, like Wyoming, have recently introduced legislation for a state-issued stablecoin.

A few weeks back, the House Committee on Financial Services discussed whether stablecoin and digital asset rules must be handled at the state or federal level.

Patrick McHenry, the ranking committee’s member from North Carolina, has encouraged the committee to investigate state-level regulatory frameworks in lieu of a full statutory provision on stablecoins.

Stablecoins have been a hot discussion topic in many different parliaments. Late last year, Japan said that it would follow the United States for stablecoin regulation.