As North Carolina legislators move ever closer to amending the state’s Money Transmitters Act to include Bitcoin processors—making it the first state in the U.S. to enact such legislation—advocates for supporting innovation in the emerging cryptocurrency industry are on opposite sides of the bill.
June 23, 2016
Bitcoin Enthusiasts On Both Sides of N.C. Bill Regulating Digital Currency Industry
North Carolina could be the first state to regulate bitcoin and digital currency companies. Whether that's good or bad is up for debate.
Update: The North Carolina Senate approved changes to the Money Transmitters Act to account for Bitcoin and blockchain technology companies 44-3 on Monday, June 27. The bill now goes to the Governor for signature. Cryptolina co-founder and bitcoin enthusiast/lobbyist Dan Spuller calls it “a milestone in America”.
The bill passed the Senate’s finance committee this morning and could face a vote as soon as Friday. The House has already voted in favor of the bill.
But Bitcoin proponents can’t seem to agree on whether the bill is good or bad for the industry. Some enthusiasts, including the founders of the Cryptolina Bitcoin Expo event series, are siding with the Washington D.C.-based Chamber of Digital Commerce in supporting the changes. That’s because they’ve spent months lobbying the state’s Banking Commission and legislators to include provisions that exempt Bitcoin 2.0 companies and others that don’t transact currency from onerous regulations and hefty fees.
Meanwhile, an anonymous group called Bitcoin Regs NC (with a Raleigh address), is actively pushing legislators to vote no, claiming the law will hinder job creation and innovation in the state.
In an email this morning to legislators and supporters, they argue that Bitcoin should never be regulated because it is property, not money; it’s an economic innovation that is supported by the venture capital community; it doesn’t involve banks; and it’s only one of hundreds of types of cryptocurrencies. New regulations would impact all of them, not just Bitcoin.
Triangle Bitcoin and Business Meetup founder Jameson Lopp also shared concerns in a Medium post last fall, expressing hope that the legislature leaves the act as it is, following the lead of California.
Cryptolina co-founder Dan Spuller says his team is cautiously optimistic on the legislation, but happy that the industry has gained so much legitimacy within state and federal government since the first Cryptolina expo in August. He hopes future changes can be made as the industry evolves.
The Chamber of Digital Commerce, meanwhile, is applauding the state’s work. To a reporter for industry publication Coindesk, Chamber founder Perianne Boring (pictured above) called the bill “the most comprehensive and business-friendly” of any working their way through state governments. That’s largely due to an updated Q&A by the Banking Commission clarifying the definition of money transmitters. (Note that Bitcoin processors will be considered transmitters and will be required to meet the same regulations as banks.)
In a news release to reporters yesterday, Boring called the bill “pro business, technology, jobs, investment, and innovation in North Carolina” and said it will make North Carolina attractive to new businesses interested in locating here, as well as to existing companies using or experimenting with blockchain or bitcoin technology in the state.
Whether that’s true will only be known pending a vote and time to see how the industry reacts—or how fast other states follow suit or take different approaches.
We’ll update this story after the vote.