Caitlin Long was a college student in her native Wyoming when she first interned at the state legislature. Almost three decades later, in 2017—after she climbed the Wall Street ladder at Credit Suisse and Morgan Stanley and witnessed the birth of Bitcoin—she decided to return to her old stomping grounds to talk up her new interests. She found some familiar faces. “One of the legislators was still there, believe it or not, 27 years later,” Long recalls. “The stars just aligned.”

Over the course of a 20-day legislative session in Cheyenne, Long “camped out on my own time and dime” for “patient, one-on-one conversations” with lawmakers about Bitcoin, blockchains, and the promise of the cryptocurrency industry. “They liked the story,” she says. And over the ensuing four years, they’ve helped her write multiple chapters. Long, now the founder and CEO of “crypto bank” startup Avanti Financial Group, has helped pass 24 crypto-friendly laws, giving Wyoming a reputation as cryptocurrency’s promised land—or its Wild West, depending on whom you ask.

One of those laws created a bank charter that enabled companies—including, eventually, Avanti—to become “special-purpose depository institutions,” or SPDIs, entitling them to operate throughout the nation, handling both dollars and digital currencies. (Long says she only decided to start a SPDI months after the law was passed.) Avanti’s next step could be even more transformational: If they win the Federal Reserve’s blessing, SPDIs will be able to process transactions between traditional and crypto currencies on their own, without having to partner with traditional banks. That could reduce the high transaction fees that have dogged the crypto world, while increasing consumers’ comfort level with the industry. (Avanti will focus on institutional clients like crypto companies and large investors, like the pension funds with whom Long once worked at Morgan Stanley. Digital exchange Kraken, the first company to receive a Wyoming SPDI charter, focuses more on consumers.)

When she first started her advocacy, Long was trying to change a state money-transmitter law that had stymied her efforts to donate Bitcoins to her alma mater, the University of Wyoming; at the time, any entity accepting Bitcoin had to hold an equal value in dollars in reserve. Today crypto companies are exempt from those restrictions. They’re also exempt from sales tax and property tax. Wyoming’s most recent crypto law, effective July 1, creates a special type of limited liability status that protects entrepreneurs, software developers, and others participating in blockchain-based “decentralized autonomous organizations,” or DAOs.

DAOs don’t have a central corporate authority, and Wyoming’s latest law is intended to “create a legal bridge from the decentralized world, and the development occurring there, to a traditional legal structure,” says Matt Kaufman, an attorney and partner at the Hathaway & Kunz law firm, who co-wrote the law. (He’s also a partner at BXE Capital, a crypto-focused investment fund.) “One of the big problems we were hearing from the industry is: If you have a decentralized idea, how can you develop that idea with some limited liability protection, like any other entrepreneur working in a startup?”

All these new laws, Long and her allies say, will bring more business to Wyoming. More broadly, the state is trying to draw proactive guidelines under which crypto businesses can grow—at the same time that federal regulators have taken a slow and often suspicious approach to the industry. “States have always been the incubators of innovation,” says Cynthia Lummis, Wyoming’s pro-crypto junior U.S. senator. “This gives the federal government a chance to use state governments as a petri dish.”

If it wants to, that is. Fed Chairman Jerome Powell this month questioned the need for cryptocurrencies, while members of the Senate Banking Committee this week aired more skepticism at a hearing entitled “Cryptocurrencies: What are they good for?” But Lummis, a Republican who partnered with Arizona Democrat Kyrsten Sinema to create the Senate’s bipartisan Financial Innovation Caucus, advocates putting crypto rules into the hands of Congress first, rather than federal regulators. “There are so many players in this space, that the way we define things—as a security, a commodity, a central-bank digital currency versus a stablecoin—will have an effect on what regulatory agency has primacy at the federal level,” she says. “And I think that Congress is the appropriate definer.”

Wyoming’s regulatory regime also has its critics. Because the state’s special charters could help crypto companies gain a national foothold, “what Wyoming is doing could potentially threaten financial stability down the road,” warns Lee Reiners, a former New York Fed official who’s now executive director of the Global Financial Markets Center at Duke Law. He fears a repeat of the subprime mortgage crisis of 2008, when institutional investors bet big on esoteric securities, sending destructive ripples through the whole financial system when those securities crashed.

Nor is Reiners a fan of Long’s influence. “I think a narrow group of self-interested individuals, primarily led by Caitlin Long, essentially hijacked the legislative process,” he says. “It’s just not good government.” In an emailed response, Long says she is “proud of the interest I have in advancing the robust regulatory framework” of her home state, and that she sees Wyoming regulations as a “straight-jacket” for banks that handle crypto, therefore “a solution to the problem, not the problem.”

Good government or not, it may have reached its limits. Avanti was supposed to open for business early this year. But in order to process transactions between dollars and Bitcoin, it needs Fed approval to directly access the U.S. payments system. Avanti applied to the Kansas City Fed for a “master account” last October. Almost a year later, it’s still waiting. “We do have a plan B,” Long says, declining to specify what that is. For now, she’d prefer to work with the Fed, not fight it.

Editor's Note: This article has been updated to include a longer version of Caitlin Long's response to critics of Wyoming's crypto regulations.

This article appears in the August/September 2021 issue of Fortune with the headline, "Wyoming's blockchain pioneer."