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Illinois Proposes Legislation To Enable Banks To Hold Cryptocurrencies

Illinois is set to become the second state after Wyoming to facilitate the holding of cryptocurrency.

Illinois is set to become the second state after Wyoming to facilitate the holding of cryptocurrency. A recent release stated that legislation overtures are in top gear to ensure that banks and other custodial services would be able to hold and operate cryptocurrency accounts.

The buzz around cryptocurrencies is not letting off. This has seen to it that even the most vocal critics are having a rethink on the sustainability of the asset class, once described by Warren Buffett as “delusional”.

Legislators in the Midwest state are considering a bill that would effectively provide a legal and regulatory framework that enables banks and other custodial services to hold digital assets for their clients. The essence is to create a special purpose trust enabling depository of crypto assets.

Special Trust For Digital Assets

Last April, the bill scaled the House hurdle, gaining unanimous support but couldn’t make it to the Senate before the recess. It is expected to be passed by the upper chamber this fall. If this happens, Illinois would be the second state to pass Cryptocurrency special trust depository law after Wyoming. Wyoming in 2020 approved a chartered banking license for the digital currency exchange company, Kraken, effectively making it the first cryptocurrency bank in the state.

Proponents of the bill are of the opinion that its passage would make Illinois the cryptocurrency hub of the Midwest, with the potential to attract blockchain startups to the state. They maintain that this will turn Chicago into a major crypto financial center in the US.

Providing Stability And Regulation for Crypto Businesses

According to Rep. Margaret Croke, (D- Chicago), who is the leading sponsor of the bill, the strategic objective is to signal businesses in the cryptocurrency space that Illinois is willing to create stability as well as the regulatory environment that would engender them to thrive.

“It’s not only just about the charter itself, but it’s also the signal to businesses who are dealing in this space that we will create a stable regulatory environment. This is the one time we could beat New York in financial services or in an emerging industry.” she said.

Flowing With The Trend

The Chicago area is already hosting a myriad of cryptocurrency themed businesses such as mining and cryptocurrency ATM companies. Sangha Systems is one of such mining companies that opened their Midwest branch in 2019. The New York based company set up its mining operation in a former steel mill at Hennepin, 160 km south-west of Chicago. The company is already planning to switch to solar power to address concerns about carbon emission.

The drive to give cryptocurrencies special status in the state of Illinois comes amid dissatisfaction with the high demand of electricity required to mine digital currencies such as Bitcoin. This has raised concern among environmentalists but has not deterred enthusiasts as adoption has continued to be widespread. This is directly responsible for the wild market tendencies that have seen the price of Bitcoin fluctuate widely. However, the coins have continued historically on the bullish trend.

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