Bitcoin: How Wyoming Became America’s Improbable Cryptocurrency Capital

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Earlier this year, U.S. Senator Cynthia Lummis of Wyoming, a 66-year-old woman born on a cattle ranch, temporarily changed her Twitter avatar to feature glowing red laser eyes in honor of Bitcoin. The gesture was a nod to the island world of cryptocurrency, where many devotees vowed to swap their photos until Bitcoin’s price hit $ 100,000, in a meme known as # LaserRayUntil100K. It’s the latest, slightly bizarre marker of Wyoming’s unlikely rise in recent years into a cryptocurrency hub, away from the buzzing fintech hubs of New York and San Francisco.

Wyoming has always been a little different from the rest of the United States. It was the first state to grant women’s suffrage, and its contemporary politics are deeply libertarian. It is home to some of the most spectacular public lands in the world, such as Yellowstone National Park, and it is also the country’s largest producer of coal. Its nickname is the State of Equality, and its high proportion of landowners and ultra-wealthy tourists has made the city of Jackson Hole the most unequal place in the country.

But it was this combination of an extractive economy and an independent mind that allowed crypto to take root in Wyoming about five years ago, according to State Senator Chris Rothfuss, co-chair of the committee. states on blockchain and fintech. He and another representative had received a request from a voter to review Wyoming’s crypto laws because they were struggling to use certain crypto products in the state. As the senator explored more, he realized that the burgeoning decentralized technology could be a major boon to the state’s economy.

Wyoming as an energy producing state and as a mineral extracting state faces challenges. Our economy has been dependent on coal, oil and gas, as well as state revenues, for decades, as long as I am alive, he told The Independent. We understand that the future of Wyoming must rest on a forward-looking, diverse economy rather than this retrospective dependence on hydrocarbons.

Crypto might be the next big thing, he thought, but state laws weren’t ready to handle the ever-changing world of digital finance. Not that the rest of the country was much better.

Looking at it, we learned that we only have horrible laws and statutes when it comes to cryptocurrency, digital assets, whatever is in that space, he added. We were about as bad as you could be, but no other state in the country had anything that looked like a plan for the way you would run it.

In 2017, the state formed a blockchain task force and began holding hearings with cryptocurrency stakeholders. Caitlin Long, a Wall Street veteran and native of Wyoming, has also become an influential funder, including offering a scholarship for University of Wyoming women engineers using cryptocurrency, as well as founding her own. crypto company, Avanti Bank & Trust. A slew of new crypto-friendly laws followed the push. Fast forward to 2021, and Wyoming has at least 24 different crypto laws, covering everything from banks and courts, to smart contracts, payment processing and the exemption of digital asset companies from the. most taxes. (Wyoming already has no personal or corporate income tax).

Big crypto firms like Ripple, a payments company valued at $ 10 billion, and Kraken, a crypto exchange valued at $ 4 billion, have set up operations in the state. And Wyoming is home to a number of new financial institutions, including the first state-chartered crypto banks, Avanti, as well as a subsidiary of Kraken, as well as the American CryptoFed DAO, the first decentralized autonomous organization (DAO). country’s legal system, a parallel, crypto-based monetary system ruled by machine learning and token holders, which began operating on July 1.

Wyoming is leading the way for forward-looking financial services regulation and shares many of the same values ​​as the crypto community in terms of individual liberty and liberty, David Kinitsky, CEO of Kraken Bank, told The Independent in a statement.

Others point to the state’s long-standing reputation for business and technological friendliness.

Wyoming was the first state in the Union to recognize LLC status in the 1970s. Since then we’ve seen a boom in technology and our state legislators have really been innovative and foresight. said Marian Orr, CEO of American CryptoFed DAO and former mayor of the city of Cheyenne. “From an infrastructure perspective, I’ve really watched how Wyoming has become a player and a technology hub. We have the right kind of weather. It’s cool here. It’s windy. We have all that is. really good for technology.

Microsoft, for example, has a large data center in Cheyenne.

Whether all of this excitement is really changing Wyoming’s economy is an open question though. The companies themselves have certainly been successful. Avanti, the crypto-bank, closed a $ 37 million funding round in April. Beyond deposit fees, cryptocurrencies add virtually no tax to state coffers, and the decentralized nature of digital finance means that even successful Wyoming crypto businesses won’t need to. a great presence in person.

Senator Rothfuss has named Kraken as possibly the state’s largest crypto employer. He currently has five employees in the state, although he told The Independent that he plans to at least double that staff in the near future, as well as investing in the community through sponsorships and conferences. .

Over the next few years, we will look to expand Krakens’ footprint and develop a suitable FinTech and crypto ecosystem in the region, he said in a statement.

The CEO of American CryptoFed DAOs is its primary employee based in Wyoming.

It’s not so much about a big management team or hiring a lot of people, but a growing economy where everyone is part of the governance structure, Ms. Orr said. You don’t pay a lot of wages. You are essentially creating an economy where everyone wins and everyone grows.

Lee Reiners, executive director of Duke University Global Financial Markets, told Slate he feels the state has been totally deceived by all of this crypto.

There are also climate concerns. A recent analysis from the University of Cambridge found that bitcoin mining, the hyper-complex computer processes used to unlock a new cryptocurrency supply, uses more energy than Argentina as a whole.

On that note, some in the state have come up with a distinctively Wyoming solution: hooking crypto-mining rigs directly to natural gas wells, which often burn natural gas in the air before they are connected. to a gas pipeline.

It combines the old, the new, and a healthy dose of robust individualism, and for that reason it couldn’t happen anywhere else.

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