SHERIDAN – Wyoming lawmakers have fully embraced the state’s developing blockchain industry as a potential building block for the future of its economy.
A total of thirteen bills related to blockchain technology have sailed through the Legislature during its past two sessions. Combined, those laws have created a regulatory environment that has drawn national attention from companies hoping to develop the technology.
The Legislature’s Blockchain Task Force – which met in Sheridan this week – hopes that its efforts to build on the state’s existing laws will convince those companies to make the move to Wyoming.
On Wednesday, Caitlin Long, a member of that task force, spoke at a meeting hosted by the Sheridan County Republican Women and said she is optimistic Wyoming will start seeing the legislation pay off, and soon.
Long spent years as an investor on Wall Street, running Morgan Stanley’s pension business, and witnessed first hand how inaccurate, or outright dishonest, accounting practices had over-leveraged and destabilized financial assets. Companies sold more stock shares than they had issued, she said, and made transactions with assets they didn’t actually own.
The consequences of the pervasive unreliability of financial records became clear in 2008, when shocks on Wall Street dragged the national economy into a recession, Long said.
“I was pretty horrified, because at the end of the day (the system) was pretty unstable and unfair,” Long said.
In researching solutions, Long said she learned about the cryptocurrency Bitcoin in 2012. By relying on the security provided by a blockchain network, Bitcoin was a financial asset that could be meticulously tracked and could not be lost within financial institutions.
“It lifted a cloud off my shoulder; it made me very optimistic,” Long said.
A blockchain is a type of network that, in theory, has countless applications and allows for hyper-accurate record keeping that updates in real time. Essentially, a blockchain stores its complete ledger with each node, or user, in the network. When new information gets introduced into a blockchain – if someone makes a change on a balance sheet or introduces a new unit of a cryptocurrency, for instance – it has to be verified by every other node in the network.
That authentication system makes it virtually impossible to tamper with an accounting ledger or “counterfeit” new cryptocurrencies; hacking a blockchain would require someone to simultaneously break into every node of the network and instantly make the same change in all of them.
Long began investing in Bitcoin and – after trying to make a donation to her alma mater, the University of Wyoming, using the currency – learned that Wyoming’s money transmitter laws made cryptocurrency transfers illegal in the state.
She began working with lawmakers to craft legislation that would change that and, during the Legislature’s 2018 budget session, helped to advocate for a set of blockchain-related bills; all of them passed.
That initial package of legislation transformed Wyoming from one of the most restrictive states regarding cryptocurrencies to the most permissive.
During the latest legislative session, lawmakers passed eight more bills related to blockchain technology. Those laws have made Wyoming one of the most progressive states with regards to blockchain, Long said.
Rep. Cyrus Western, R-Big Horn, who is an alternate on the Legislature’s Blockchain Task Force, said the committee spoke with a number of companies this week considering moving to Wyoming. Many of those companies offer financial services, Western said, but the technology is attracting interest from a wide range of industries.
“The applicability of blockchain is huge,” Western said after Long’s talk. “Anything that involves detailed record keeping, blockchain has the potential to really transform it.”
While Wyoming currently has the lead in attracting blockchain companies, other states have been catching up.
The task force is working on legislation that will help Wyoming keep that lead and, it hopes, encourage companies exploring a move to Wyoming to make the leap.
“The interest really is there, the momentum is building and all of the signs are pointing to the momentum getting even bigger,” Western said.
Blockchain and cryptocurrencies aren’t a sure thing, Long said, but they have tremendous potential.
In the coming years, Wyoming will see whether all of that potential can be realized.