Colorado Could Be Next in the Race to Bank Crypto

Colorado is exploring the option of extending crypto-specific banking laws in order to cater to the underbanked cannabis industry.

Colorado is proposing a joint initiative with Wyoming, New Mexico, Arizona and others to bring blockchain legislation to the attention of federal lawmakers.

Thanks to Wyoming's work on blockchain legislation, Colorado can save time and effort by perusing 200 pages of legislation, chock-full of banking complexity.

Colorado's new special banking working group, convened by the OEDIT, continues the work done over the last 12 months by the Colorado Blockchain Council.

In March, Colorado signed its Digital Token Act, also similar to Wyoming's token law.

The Colorado banking group's roadmap was set out with military precision, according to Joseph Pitluck, CEO of FreeRange, which helps banks and trust companies manage digital assets.

Former Wall Street executive Caitlin Long, the gubernatorial appointee to the Wyoming Blockchain Task Force, pointed out that it took Colorado two, 120-day legislative sessions to pass its utility token law.

"I wish Colorado luck but I am very skeptical that they will be able to pull it off. A big reason is the incumbent banking system, which was a big obstacle to us in Wyoming and is much stronger in Colorado than it was in Wyoming."

Colorado's cannabis industry has been hamstrung between state and federal law for some years now, and has evolved to the point that over 30 banks and credit unions quietly provide services to the multibillion-dollar industry, according to the Colorado Bankers Association.

Another consideration on the table for Colorado is lending, which would be a very different animal from the Wyoming SPDI: the latter is non-lending and not FDIC insured, requiring crypto businesses to hold reserves of cash equal to 100 percent of their deposits.