Wyoming’s economy is powered by some of the oldest industries in human history, including mining, agriculture and tourism. But in recent years the state has emerged as an unlikely champion of far newer inventions: cryptocurrencies and the blockchain technology that powers them.
Now, the Cowboy State is arguably the most crypto-friendly jurisdiction in the United States, thanks to state leaders’ shepherding a series of new laws.
These changes have encouraged several high-profile companies in the industry to move operations from traditional high-tech hubs like San Francisco to Wyoming’s capital city of Cheyenne, including crypto exchange Kraken, blockchain platform Cardano and payment protocol firm Ripple Labs. But it has also put the state on a potential collision course with federal regulators who appear far more skeptical of the costs and benefits of blockchain technology than libertarian-leaning Wyomingites.
Wyoming State Sen. Chris Rothfuss, chairman of the chamber’s blockchain committee, told MarketWatch that a desire to diversify the Wyoming economy has been a primary motivator of his state’s embrace of the crypto industry.
“We do a lot of coal, oil and gas, and those don’t necessarily have the bright, shiny futures they once did,” the Democrat said. “We’re really looking for opportunities to bring advanced emerging technologies to Wyoming.”
Rothfuss said that it’s not lawmakers like him who were responsible for driving change in Wyoming. Though the Wyoming state government has a history of business-friendly regulation, he argued that it’s the state’s residents, along with entrepreneurs who grew up in the state but left for better economic opportunities, who deserve much of the credit for driving these regulatory changes.
One such member of the Wyoming diaspora is Caitlin Long, founder and CEO of Avanti Bank & Trust, which aims to provide custodial services for institutional investors in cryptocurrencies. A Wall Street veteran with two decades of experience working for Salomon Brothers, Credit Suisse
and Morgan Stanley
she became interested in bitcoin
in 2012 after appreciating the potential of blockchain technology to enable faster settlement of financial transactions.
In 2017, Long attempted to endow a scholarship for female engineers at her alma mater, the University of Wyoming, using appreciated bitcoin, but found the school wasn’t able to accept the donation because Wyoming laws barred the operation of crypto exchanges in the state. This episode motivated her to advocate for changes to state law regarding digital assets.
Long left Wall Street in 2016 and in 2018 volunteered to serve on the Wyoming Blockchain Taskforce, where she worked with the legislature to craft more than a dozen new laws related to blockchain and digital assets. As the project gained momentum, Long said, it attracted public attention that encouraged even greater support from lawmakers.
The legislature held hearings on the laws where a diverse set of Wyomingites showed up, some driving upwards of eight hours to be there. “When the legislators walked in the room, they saw young people who were eager and anxious and wanted legal and regulatory clarity,” Long said in an interview with MarketWatch.
A Digital Wild West
The laws enacted by Wyoming in 2018 and 2019 clarified the treatment of digital assets in commercial law, setting the legal foundation for so-called “smart contracts,” or contracts that are automatically executed by computer code on the blockchain. They also made it easier for crypto investors to set up limited liability company though which investors who live outside the state can still store their digital assets in Wyoming for legal purposes. On Wednesday, Wyoming’s Republican Gov. Mark Gordon signed legislation to give legal status to decentralized autonomous…