Before the 2018 legislative session, Wyoming was no friend to the emerging technology. But new legislation is solidifying the state as a leader.
(TNS) – CHEYENNE, Wyo. – Much ado was made by lawmakers and blockchain companies about legislation passed in March, making Wyoming one of the friendliest states to cryptocurrency and blockchain technology.
And if you ask Corey Allen Billington, a professor of practice at the University of Wyoming, it’s not just pomp.
“I’m sky-high on the potentiality of blockchain,” he said. “In my mind, it’s right where the internet was in 1997.”
Wyoming is now set up statutorily to become a national and world leader in the blockchain sector, if the legislative measures’ proponents are correct.
All five bills related to blockchain technology – House Bills 19, 70, 101 and 126 and Senate File 111 – made their way through the Wyoming Legislature during the 2018 budget session.
Blockchain is essentially a digital ledger for storing information, including cryptocurrency. Cryptocurrencies – the most commonly known is bitcoin – are essentially digital money.
Many have touted Wyoming as an ideal place for the blockchain sector to flourish. Given Wyoming’s need for economic diversification going forward, state lawmakers have gone all-in on making sure statutes can foster the sector.
The legislative measures were, in part, seen as a part of Wyoming’s economic diversification strategy known as ENDOW – which stands for Economically Needed Diversity Options for Wyoming. The 2018 session was, no doubt, a success for the proponents of Gov. Matt Mead’s ENDOW initiative, as all the major legislative pieces and funding fell into place, including the cryptocurrency and blockchain components.
As the technology started to emerge, Wyoming had a strict regulatory environment that was unfriendly to cryptocurrency and blockchain. But that’s been reversed, with Wyoming now positioned to attract companies that many hope will play a key role in improving the state’s economic fortunes.
A big part of Wyoming’s economic concern is the so-called “brain-drain,” where the state invests heavily in education, only to see its youth flee to other states in pursuit of more fruitful opportunities. Billington points to UW graduate student Matthew Lehmitz as an example of how blockchain could play a critical role in keeping Wyoming’s young intellect commodity at home.
Lehmitz is working in the UW Business Creation Factory to launch his own blockchain business in the state – in no small part, he said, because of the altered regulatory environment.
“Early on, we were seeing the Legislature was considering these things, and it seemed like there was a lot of support,” Lehmitz said. “In a sense, we wanted to get in early and try to take a piece of the market once it becomes available.”
While he’s not exactly sure yet what his blockchain will do, Lehmitz said Wyoming’s new statutory environment seems to be about as good as it gets in the U.S.
Rep. Jared Olsen, R-Cheyenne, was one of the legislative measures’ key proponents. Olsen said he understands that blockchain and cryptocurrency seem like intangible entities that are hard for people to wrap their minds around.
“For me, there was a tremendous learning curve,” he said.
But once the technology’s potential became something he could grasp, Olsen said his enthusiasm grew and spread throughout the Legislature.
Also, similar to the internet’s presence in society, Billington said there will be winners and losers with blockchain and cryptocurrency. Business models and the world will change as the innovations start to take hold, he said.
“It was true with ATM machines and the internet, but it’s a better way,” Billington said. “You can think of blockchain as being far cheaper and far safer than existing data security or financial security.”
As with any emerging technology, however, Billington said the possibility exists of nefarious actors taking advantage of shortcomings to commit fraud.
“A new technology doesn’t prevent good old-fashioned fraud,” he said. “I can still convince you to give me your digital wallet.”
But Billington said it’s no reason to allow fears to get in the way of embracing what he sees as a net benefit to society.
“People were afraid of cars when they first came out,” he said. “They were better, faster and cheaper. And if we play this smart, we could become a technology powerhouse.”
Olsen said there’s no doubt Wyoming’s approach to handling the new regulatory environment will need to be pliable. As such, the Legislature will have a taskforce to address issues with blockchain and cryptocurrencies going forward, he said.
The changes won’t happen overnight, but Olsen said he’s confident movement will be seen in coming months. As Wyoming continues struggling with budgetary shortfalls for government services and K-12 education, there’s no clear answer in sight to save the state’s bacon. Even with a friendlier federal regulatory environment for Wyoming’s breadbasket mineral commodities, most economists and lawmakers agree another boom that would reverse the state’s economic fortunes is not forthcoming.
Rob Godby, a professor of economics at UW and longtime state policy adviser, said it’s hard to tell what will happen with blockchain and cryptocurrency. But he said it’s potentially another tool in the toolbox in the state’s quest for economic diversification.
“Maybe the thinking is we can do what Delaware and South Dakota did back in the early days of bank deregulation and attract those companies,” Godby said. “We had pretty strict regulations against cryptocurrency, but that’s been reversed. All that said, it remains to be seen if this is going to be the place where blockchain really takes off.”
©2018 Wyoming Tribune-Eagle (Cheyenne, Wyo.) Distributed by Tribune Content Agency, LLC.