As many U.S. states are trying to figure out how to utilize blockchain, one state wants to be at the forefront of the cryptocurrency revolution.
According to the Financial Times, Wyoming is currently the only state that has legislation enabling it to create a framework for blockchain and crypto businesses. Tyler Lindholm, a rancher who also serves in the state’s House of Representatives, helped create a package of bills passed in March.
One of those bills recognizes tokens issued in initial coin offerings as separate from money and securities, while another makes cryptocurrencies free from taxation. In addition, cryptocurrencies are also now exempt from state laws on money transmission and corporate records, and filings and votes can legally be recorded and stored on a blockchain.
As a result, around 200 new companies have opened in Wyoming over the past few months.
Wyoming Governor Matt Mead says technology could become a vital “fourth leg” of Wyoming’s economy, behind energy, tourism and agriculture. It could also help the state regain the footing its hasn’t been able to recapture since its pre-financial crisis level of output.
But not everyone is convinced. Marian Orr, the mayor of the state capital Cheyenne, is worried that an invasion of bitcoin miners will suck the electricity grid dry of cheap power and then leave without paying their bills. Others are concerned about rampant fraud in the market.
“It can be hard to tell the ‘black hats’ from the ‘white hats,’” says Sarah Reese, manager of economic and community initiatives in Laramie, using an analogy from old western films when the bad guys dressed in black and the good guys were in white. “We don’t want to sell our communities down the river. The problem is, there are all kinds of shades of grey.”
Still, it makes sense that Wyoming would appeal to crypto startups, especially because of its cheap rents and cheap power, says Peter Hatzipetros, a New York-based lawyer. It is also one of a handful of states with zero individual income tax and one of two (along with South Dakota) without any taxes on corporate profits or revenues.