Wyoming Defines Cryptocurrency 'Utility Tokens' As New Asset Class

The U.S. has very contradictory and uncertain classifications of cryptocurrencies that differ between the federal agencies. For example, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both have different opinions on what they consider the definition of “cryptocurrencies” to be.

The U.S. state of Wyoming is looking to be the first government agency to define cryptocurrency utility tokens as a new assets class.

As for the SEC, they have stated unequivocally that all the initial coin offering (ICOs) and tokens they have looked at are securities. In other words, the SEC has declared all unregistered ICOs as illegal because they are violating U.S. securities laws.

However, the CFTC considers crypto tokens as commodities.  Supporting this stance, a District Judge in New York, Judge Jack Weinstein, ruled last week that “Virtual Currencies can be regulated by the CFTC as a Commodity."

As the federal ‘securities or commodities’ war rages, the state of Wyoming is taking action by legislating a definition, among other things.

Since the beginning of the year, the state's legislature has passed five crypto-related bills one of these bills that provides for the definition of cryptos as a brand new assets class, that is, a commodity.

This definition is found in the “Utility Token Bill,” (House Bill 70) which was passed by the Wyoming State Senate on March 7. Over the weekend, Governor Matt Mead signed the bill into law.

Why The “Utility Token Bill”?

Before now, the state was a haven for crypto businesses like Coinbase and other exchanges, however the unfavourable state money transmission laws chased these businesses out of Wyoming. Already, with the new law passed, some are beginning to make their way back, including new businesses.

With the first step taken by the state of Wyoming, other   Federal agencies may consider this approach.

Bank of England Governor Recommends Replacing Dollar With 'Libra-Like' Digital Currency

  • BOE Governor Mark Carney proposed replacing the US dollar with a libra-like digital currency as the global reserve. 
  • Called for a dramatic shift in policy to address the changing economic landscape. 

Bank of England Governor Mark Carney has made a radical recommendation for central banks that the U.S. dollar be replaced with a Libra-like digital reserve currency. 

Replacing the Dollar

Speaking at the Federal Reserve’s annual Jackson Hole Symposium on Aug. 23, Carney called for a dramatic shift in global monetary policy that would see central banks taking a greater interest in digital currencies such as Facebook’s forthcoming libra. 

The BOE Governor’s proposal would replace the U.S. dollar as the world’s reserve currency with a digital alternative. While it was unclear if Carney was actually suggesting that libra could be used to fill the void, his intent was to spur interest in a fiat alternative for global reserves. 

Carney argued that proactively replacing the dollar with a digital coin substitute would be preferable to allowing another national currency usurp its status--such as the Chinese renminbi. 

He pointed to the global economic uncertainty in part being generated by deteriorating U.S. trade relations, 

The combination of heightened economic policy uncertainty, outright protectionism and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy.

He continued, 

When change comes, it shouldn’t be to swap one currency hegemon for another. Any unipolar system is unsuited to a multi-polar world. We would do well to think through every opportunity, including those presented by new technologies, to create a more balanced and effective system.

Cryptocurrencies Gaining Prominence

The introduction of a non-fiat currency could have the effect of devaluing the dollar, and most national currencies, which could be one way for central banks to introduce inflation to erode away the record levels of debt accumulating globally. 

Some have speculated that an alternative asset such as gold could be used as an intermediate. However Carney, who announced several months ago he would be stepping down as Governor of the BOE, has shown a route to fiat alternatives which includes the creation of digital currencies.

He lauded the technology for its efficiency in payments and cross-border transactions, 

The most high profile of these has been Libra – a new payments infrastructure based on an international stablecoin fully backed by reserve assets in a basket of currencies including the US dollar, the euro, and sterling. It could be exchanged between users on messaging platforms and with participating retailers.

While Carney’s suggestion to replace the U.S. dollar is one of the most radical proposals yet, it does give insight into the global trend in central banks to pursue digital currencies as an alternative to their outdated fiat counterparts.