State Regulation Roundup
Several states are in various stages of implementing regulations related to digital currency. Below is a short summary of the actions currently underway.
As discussed in a previous post, in February 2015 a California Assembly member introduced a bill (AB 1326) proposing a licensing framework for digital currencies in the state. The bill has since been approved by the California Assembly and is now under review by the California State Senate. If passed in its current form, the bill would require that digital currency companies engaging in “the business of virtual currency” (subject to certain exemptions) and doing business in California obtain a license from the Commissioner of Business Oversight.
Since the final version of New York’s BitLicense was announced earlier this month, the regulations have had an impact. One mining pool has shut down entirely and another mining pool and a digital currency exchange have denied their services to those with New York IP addresses. These companies have taken the position that doing business under New York’s BitLicense is not worth the cost and/or risk. Time will tell if this view is limited to a select few or if it is more widespread among those in the digital currency community.
In New Jersey, a bill titled the Digital Currency Jobs Creation Act, or A4478, has been introduced to the state legislature and aims to bring jobs to the state through tax breaks for certain digital currency companies with a minimum number of employees. Similar to other states, the bill would require such companies to obtain a business license and make certain consumer disclosures. Perhaps New Jersey sees this as an opportunity to lure digital currency companies from New York
The North Carolina House of Representatives recently approved House Bill 289, which seeks to regulate digital currencies within the state, and it is now in the hands of the North Carolina Senate. The bill aims to enact a new Money Transmitters Act that would require digital currency companies in the business of transmitting money (or digital currency) to obtain a license to operate within the state.
State regulators in Wyoming are starting to explore the effect that the state’s existing Wyoming Money Transmitters Act is having on digital currency companies. Its stated goal is to protect consumers from losing their money. However the requirement that certain licensees hold 100% of the amount being digitally transferred in reserves has caused at least one digital currency company to withdraw its application in the state.