Nebraska has long been known as the Cornhusker State, but now it’s trying to become the coinhusker state. 

While Wyoming was the first state to allow digital asset depositories to establish and operate in the state, Nebraska was the second, with the enactment of the Nebraska Financial Innovation Act (NFIA) in 2021.

While Wyoming’s law doesn’t define digital-asset depositories, Nebraska’s does. The Nebraska law also permits state chartered banks to issue stablecoins. 

NFIA made it possible for blockchain-based platform Telcoin to become Nebraska’s first Digital Assets Depository Institution. Telcoin Bank’s application was conditionally approved on Feb. 4 by Nebraska’s Department of Banking and Finance. 

“This law allows us to become the first true crypto bank in the U.S. and possibly the world,” Telcoin’s President of Banking Operations, Patrick Gerhart, said. “We will be able to offer our customers access to our stablecoin from a state regulated financial institution. Having the maneuverability, transparency, and safety of the blockchain all under the oversight of the department here in Nebraska.” 

This will set the precedent for other fintech companies looking to operate within a regulated environment and enhance consumer confidence in digital assets, Gerhart said.

“They’re basically treating us as a de novo bank, not even crypto,” he said. “We’re going through a lot of the rules and regulations any other bank would.” 

“It’s not just this fun little sublet of what we’re doing. They’re treating us like a financial institution under them, which as a former traditional banker, that is how it should be. We want to be treated as a bank, a new kind of bank, but a bank nonetheless,” he added. 

Gerhart hopes the recent developments will make people notice what’s going on in Nebraska. 

“As for Nebraska being overlooked, I’m as surprised as anyone. We have a great basin of highly intelligent and hard working people who want to move the U.S. financial sector farther into the 21st century,” he said. 

The “Silicon Valley prairie” 

The small state of Nebraska has big hopes to become a niche area of digital assets. 

“There’s so much innovation coming out of Nebraska that people just don’t know about. We’re seeing a lot more interest in Nebraska, Iowa, Kansas, South Dakota, and Minnesota,” Gerhart said. “The department wants to see us succeed so that more companies domicile in Nebraska.”

With the broader crypto mood shifting from “anti-sentiment to straight up curious,” Gerhart believes more financial institutions will be looking to states that are leading the way. 

Sid Powell, co-founder and CEO of Maple Finance, said the Midwest as a whole is gaining attention for its pragmatic approach to fostering innovation in blockchain and fintech. 

“The approval of Telcoin’s charter will position Nebraska as a leader in regulated digital asset banking,” Powell said. “It will signal that Nebraska is open for business in the digital asset space, potentially drawing significant investment, creating jobs, and encouraging more firms to domicile in the state.”