Delaware could see the first significant changes to its banking laws since 1981's Financial Center Development Act, which helped Delaware become a hub for the credit card industry.
Sen. Spiros Mantzavinos (D-Elsmere) introduced a group of three bills, which he said are meant to modernize the First State's banking industry.
Senate Bill 16 adds definitions to Delaware code for “digital asset” and virtual currency” and expands the State Bank Commissioner’s authority to contract with outside parties for consultation. And it increases the commissioner's flexibility on requirements for institution approval.
It also broadens scope on interstate mergers and conversions for trust companies, along with out-of-state activity– allowing approved Delaware state trust companies to operate branches out-of-state with states that use a reciprocal policy.
Mantzavinos called these efforts "the first step" to ensuring Delaware remains competitive in a digital money market because, "these sort of apps and programs don't have state boundaries anymore."
Mantzavinos also introduced a state licensing framework for stablecoins, which differ from other crypto currency because its value is pegged to an asset like the US dollar.
Mantzavinos said his bills pull from the Genius Act, signed by President Trump last year. And he expects updated guidance from the federal government by June.
"We're waiting to see what comes from that," he said. "And giving the Bank Commissioner the flexibility to promulgate the regulations in response to that.”
Mantzavinos said his package has bipartisan support, with both the senate and house minority whips listed as sponsors.
Gov. Matt Meyer called the legislation necessary for Delaware to remain competitive.
"What you're hearing among leading bank executives is that less and less people are going to actually carry a piece of plastic in their wallet," Meyer said. "And while that creates a tremendous opportunity for many in the market, it also creates a threat to our state....That is what this legislative package is about."
The legislation package also includes a measure drafted by the Conference of State Bank Supervisors, which has been passed in other states.
Called Money Transmission Model Act, it's meant to create nationalized standards for regulating money transmitters and streamline administrative resources.
It also seeks to create stability, by asking transmitters to maintain a surety bond or bank deposit large enough to cover the average daily transactions of its customers.
According to the Conference of State Bank Supervisors, more than 30 other states have already adopted this measure.
