Virginia Senate allows state banks to become crypto custodian in latest bill

Virginia has become the latest state to pass a crypto-friendly bill.

The bill, which was passed unanimously by the Senate and the House of Representatives of Virginia, would now allow traditional state banks to offer crypto custody services.

The voting results saw 98 in favor and 0 against the bill in the House of Representatives on February 2, and thereafter, 39-0 vote in favor of the bill in the Senate. It is currently awaiting approval from Governor of Virginia Glenn Youngkin.

Per the contents of the bill, state banks interested in becoming crypto custodians are required to adhere to three conditions: an appropriate system to manage risks effectively, a systematic self-assessment process to consider the risks associated with these services, and ownership of adequate insurance coverage.

In providing such services in a nonfiduciary capacity, the bank shall act as a bailee, taking possession of the customer’s asset for safekeeping while legal title remains with the customer, meaning that the customer retains direct control over the keys associated with their virtual currency,” the bill further read.

Delegate Christopher T. Head, who introduced the bill (HB263) in January, said that he came up with the idea after learning about Texas’ efforts on the issue.

“Texas decided to tackle this topic of cryptocurrency custodian services through its regulatory process. I discovered that no state at that time, nor to date, has addressed cryptocurrency custodian services legislatively.”