Nebraska Legislature Approves Framework for Digital Asset Banks

Nebraska’s unicameral state legislature has passed a bill that would create a state bank charter for digital asset depository institutions. It’s now headed to Nebraska Gov. Pete Ricketts’ desk.

Bill 649 would create a charter that would give consumers and institutions places to custody their digital assets.

The banks will look very similar to Wyoming’s special purpose depository institutions, such as Avanti Financial and Kraken Financial. The bill also allows already existing state-chartered banks in Nebraska to open crypto banking divisions.

The bill’s passage came after a long battle between the legislature and the state’s banking industry.

“When the bill was introduced in January there was a distance between the banking industry and the digital asset deposit institutions’ proponents,” said state Sen. Matt Williams, chairperson of the legislature’s Banking, Commerce and Insurance Committee. “It was 18 weeks of constant negotiations.”

The largest disagreement was about usage of the word “bank,” Williams said.

While Wyoming SPDI banks may use the word "bank" in their name without any other qualifiers, similar crypto-related institutions under the Nebraska bill would have to put the phrase “digital asset” before “bank” every time they market themselves to customers.

Like Wyoming SPDIs, digital asset banks in Nebraska won’t lend in fiat, and each bank has to hold 100% of its assets in reserve. Unlike Wyoming's SPDIs, the Nebraska digital asset banks can't accept fiat deposits. The banks have a $10 million reserve capital requirement minimum and will be allowed to apply for access to the Federal Reserve’s payments system.

CORRECTION (21, May 17:53 UTC): An earlier version of this story claimed special purpose depository institutions in Wyoming could not accept fiat deposits. They can accept deposits.