• The governor of Louisiana signed the new law “No. 802” on June 15th
• Financial institutions and trust companies are also allowed to involve third-party providers in crypto business
• Banks can also work with cryptocurrencies on a fiduciary basis
Safeguarding virtual currencies and also involving third parties for this – financial institutions and trust companies in Louisiana have been allowed to do this since the end of June. John Bel Edwards, governor of the southern US state since 2016 and re-elected to that post in 2019, signed Law No. 802 on June 15. It came into force exactly ten days later. This is reported by the information portal The Motley Fool.
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Banks are obliged to develop appropriate risk management
“Bill No. 802” means an amendment to the revised Louisiana statutes from 1950. Under the new legislation, financial institutions and trust companies must meet certain requirements before they can actually work with cryptocurrencies. For example, they must be able to provide appropriate protocols for risk management and compliance with other existing laws, and extensively evaluate the associated risks through a methodical self-assessment. They must also have adequate insurance coverage for their services and, if third parties are involved in their cryptocurrency work, establish a service provider oversight program.
Whether the banks also take on fiduciary functions in the crypto business is up to them. If a bank decides to do this, it must be able to demonstrate the intended fiduciary powers. Otherwise, it may manage the crypto assets of its customers, but the customers retain direct control over the keys to their assets.
Speculation: The Louisiana law could serve as a template for other states
Reactions to the new law have been mixed. For example, while crypto analyst Dennis Porter congratulated those responsible for “Bill No. 802” on their work via Twitter, the comments included voices that would rather manage their crypto investments themselves. Others hope that similar laws will soon be passed in other US states.
Great work by @Eric_Peterson_ @WrightLouisiana other @pelicans_tech to get this bill passed. pic.twitter.com/HwdrzAXdFC
– Dennis Porter (@Dennis_Porter_) June 21, 2022
This shows that it will soon be possible in many places.
– Anita (@Anita00169) June 21, 2022
The Motley Fool also sees potential in the new law in Louisiana and writes that the regulation could serve as a template for similar innovations in other US states.
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