Economy & Regulation
U.S. states with positive attitudes have advanced towards bitcoin legalization – a process that a growing number of elected officials consider inevitable, if not desirable. Numerous crypto-friendly bills have been introduced, and some of them have received approval in committees and houses of state legislatures. One wouldn’t necessarily think of states like Arizona, Tennessee, and Wyoming as the backbone of a great nation’s economy. How about… pioneers of its future development?
Bitcoin Doesn’t Stink – Arizona Will Take It
For some time now legislators in the Grand Canyon State have been thinking how to facilitate residents receiving incomes and profits in cryptocurrency. If bitcoin is good for ordinary citizens and businesses, it should be good enough for the state coffers, local lawmakers have decided. Last week Arizona got closer to accepting cryptos as legal tender for taxation purposes.
Several bills recognizing coins as currencies have been making their way in the State Legislature, as news.bitcoin.com reported. Two of them, SB1091 and SB1145, were aimed at regulating tax payments with digital currency. The SB1091 draft, sponsored by four Republican lawmakers, was endorsed by the Senate on February 8, with a 16 – 13 vote, after passing the Finance Committee in January. If the bill is adopted by the House, Arizona will become the first U.S. state to accept taxes in cryptocurrency in just a couple of years. The new law states:
A taxpayer may pay their income tax liability using a payment gateway, such as bitcoin, litecoin or any other recognized cryptocurrency, using electronic peer-to-peer systems.
It then clarifies that the Department of Revenue “shall convert cryptocurrency payments to United States Dollars at the prevailing rate after receipt and shall credit the taxpayer’s account with the converted dollar amount actually received, less any fees or costs incurred for conversion”. A similar bill was voted down in New Hampshire two years ago with concerns that the state would have to bear responsibility for converting the cryptos on volatile markets. Its sponsor, NH State Representative Eric Schleien (R), explained that there would be no cost and no risk to the state, as conversion would be automatic.
Another draft law, HB2601, is expected to regulate crowdfunding through initial coin offerings in Arizona. Its first reading in the House of Representatives is scheduled for June 2, 2018, and the second reading should take place on July 2. It is sponsored by Representative Jeff Weninger (R) who is also among the authors of the tax amendments. Recently, he told Fox that state legislators want to “send a signal to everyone in the United States that Arizona is going to be the place to be for digital currency technology”.
Others Have Taken the Same Road
Tennessee is another state that may soon legalize cryptocurrencies and crypto payments. A proposal to do that has come with a bill that would officially recognize cryptocurrency financial transactions and smart contracts in the state. It would also protect ownership rights of information secured on blockchain networks.
We are not just competing with other states in this space, we are competing with the whole world.
That’s what Tennessee House Representative Jason Powell (D) said after a presentation on blockchain technology last month. The Nashville lawmaker also called for adopting a “meaningful legislation” in the Volunteer State, as reported by The Tennessean. “It is really important to say that Tennessee is supportive of this technology and we want to be a leader in this innovation”, Powell added. Local authorities have already indicated that money transmitter licenses will not be required to trade cryptocurrencies in the state.
Wyoming may also become a crypto-friendly jurisdiction and is already taking steps to improve its attractiveness for startups from the sector. Several drafts have been introduced in the state legislature. Respective committees have passed two of them and they are now ready for the House of Representatives.
According to bill 0070, “a person who develops, sells or facilitates the exchange of an open blockchain token is not subject to specified securities laws”, if the token can be exchanged for goods and services. The legislation exempts exchanges from regulations applicable to brokers and dealers. Exemptions for cryptocurrency traders and transactions are also included in a draft to amend the Money Transmitter Act (0019).
Kansas and New Hampshire are two other states that have passed legislation with crypto-related exempts in their money transmitter regulations. In Texas companies are not licensed when offering custodial exchange services to in-state customers, and Montana has no applicable money transmission laws. Authorities in Nevada have promised to create favorable conditions for startups working with blockchain technologies. Most other states have yet to adopt their regulatory frameworks.
Do you think that positive moves towards legalization in individual states will speed up adoption of cryptocurrencies on federal level in the U.S.? Tell us in the comments section below.
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