On March 3rd, the Virginia senate voted unanimously 39-Y to 0-N to pass bill HB 263 Banks; virtual currency custody services.
Banks; virtual currency custody services. Permits banks in the Commonwealth to provide virtual currency custody services so long as the bank has adequate protocols in place to effectively manage the associated risks. The bill defines "virtual currency" and provides that a bank may choose to offer such custody services in a nonfiduciary capacity or a fiduciary capacity. If it chooses to provide such custody services in a fiduciary capacity, it must possess trust powers and have a trust department approved by the State Corporation Commission.
Bill describes virtual currency as a means an electronic representation of value intended to be used as a medium of exchange, unit of account, or store of value. "Virtual currency" does not exist in a physical form; it is intangible and exists only on the blockchain or distributed ledger associated with a particular virtual currency. The owner of virtual currency holds cryptographic keys associated with the specific unit of virtual currency in a digital wallet, which allows the rightful owner of the virtual currency to access and utilize it.
Banks in Virginia will be allowed to provide its customers with virtual currencies like litecoin and custody services so long as the bank has adequate protocols in place to effectively manage risks and comply with applicable laws. Prior to a bank offering virtual currency custody services, the bank shall carefully examine the risks involved in offering such services through a methodical self-assessment process.
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