On November 12, Telcoin, Inc. (“Telcoin”) received final charter approval from the Nebraska Department of Banking and Finance (the “NDBF”) to launch Telcoin Digital Asset Bank (“TDAB”), the first Digital Asset Depository Institution in the United States. This historic charter positions Telcoin as the nation’s inaugural “true blockchain bank,” directly linking U.S. bank accounts to regulated ‘Digital Cash’ stablecoins. Dvorak Law Group (“DLG”) was instrumental in assisting Telcoin in this pioneering achievement.
TDAB was the first digital asset bank to be approved under the Nebraska Financial Innovation Act (the “NFIA”), which authorized charters for digital asset banks and put the state of Nebraska on the forefront of financial innovation and regulation of the blockchain industry. With the NFIA, Nebraska became the first state to adopt the new U.C.C. Article 12, a section providing a legal framework for transactions involving digital assets like cryptocurrencies and NFTs. Nebraska also became the second state to offer to charter digital asset depositories; with Telcoin receiving approval, Nebraska is now the first state in the country to issue a digital asset depository charter.
With this charter, TDAB is introducing its own stablecoin, Telcoin eUSD, backed by U.S. dollar deposits and short-term treasuries held in reserve. For consumers, stablecoins – a version of cryptocurrency designed to maintain a steady value – may soon be another payment option alongside checks, debit cards, and digital wallets. Telcoin believes that the trust that comes with being regulated as a bank will drive consumer adoption as well as the institutional adoption needed to scale blockchain-powered finance to the broader market.
This charter is also the first in the nation to explicitly authorize connecting U.S. consumers to Decentralized Finance (DeFi), an emerging digital ecosystem that allows customers to send, purchase, and exchange digital assets directly through the blockchain. “Our charter makes history, and not just for Telcoin, but for the entire U.S. banking system,” said Telcoin Founder and CEO Paul Neuner. “We’re proving that a bank can issue on-chain Digital Cash responsibly and operate in full alignment with U.S. regulators. Telcoin eUSD brings the speed, transparency, and affordability of blockchain into everyday finance in a way that anyone can use.”
TDAB’s approval and launch of Telcoin eUSD also comes on the heels of the Genius Act, federal legislation that establishes a framework for stablecoins and digital assets. By integrating digital assets within a regulated banking framework, TDAB bridges the $4 trillion blockchain economy with traditional finance to unlock this technology for modern money, capital markets, and finance on the internet. This model demonstrates how Digital Cash can strengthen community bank balance sheets, empower small businesses, and modernize payments at scale, setting a new standard for how blockchain and banking can work together.
TDAB also intends to help community banks nationwide adapt to the evolving technology. “There are almost 5,000 banks in the U.S., and only the largest five percent of them will be able to do digital assets in-house,” said Patrick Gerhart, President of Banking Operations at Telcoin. “We look forward to helping the other 95 percent of U.S. banks stay relevant and connect to blockchain-based finance in a safe and sound manner.”
“We’ve been working toward this landmark for years, and now Telcoin Digital Asset Bank gets to serve as a prime example for how both compliance and innovation can work together to elevate the standard of banking,” adds Neuner. “On a global stage, Telcoin will demonstrate how local institutions, national regulators, and international innovators can move together to make money flow at the speed of the internet.”
With the passing of the NFIA and the presence of TDAB, Nebraska and Dvorak Law Group have signaled to digital asset industry leaders that they are committed to financial innovation and supporting emerging blockchain technologies. Governor Jim Pillen posted, “Our message to the industry is simple: Nebraska is open for your business.”
DLG, headquartered in Omaha, Nebraska, is honored to have represented Telcoin throughout its charter application process and from the very beginning of its journey. DLG has been instrumental in guiding Telcoin through the complex financial institution regulatory landscape. The firm served as counsel to Telcoin in its application for the charter and provided statutory drafting assistance for the Nebraska Financial Innovation Act. DLG’s expertise in corporate, financial and securities law was essential in preparing a comprehensive application that met the rigorous standards of the NDBF.
From assisting in the drafting of the Nebraska Financial Innovation Act of 2021, to supporting Telcoin through the application and hearing process, and now through the granting of the state’s first digital asset depository institution charter, DLG has firmly established itself as a leader in digital asset financial services law, and welcomes the opportunity to partner with and assist prospective clients with the evolution of their digital asset financial services.
Author(s)’ Names(s), Title(s), and Email(s):
Mark C. Quandahl, Of Counsel, mquandahl@ddlawgroup.com
Kaitlyn P. Banks, Associate, kbanks@ddlawgroup.com
Kristin L. Kludt, Law Clerk, kkludt@ddlawgroup.com