In 2021, we examined the issues of regulating cryptocurrency and blockchain technology. As a refresher, cryptocurrency is a digital or virtual currency secured by cryptography and based on blockchain technology. Blockchain is a decentralized technology spread across a myriad of computers that manage and record transactions and is known for its security. The government has noticed the growing cryptocurrency market. Lawmakers have introduced myriad legislation in an attempt at regulating cryptocurrency and blockchains over the last few years, including in 2022.
More than 10,000 different cryptocurrencies are traded publicly, representing a total value of more than $1.7 trillion. However, unlike the U.S. dollar, cryptocurrencies are not issued or backed by the U.S. government or any central bank.
Blockchain technology is essentially a more nuanced database. Blockchains collect information in groups, a.k.a. blocks, which hold specific sets of information. When the storage capacity of a block is filled, they are chained to previously filled blocks, forming a chain of data – a blockchain. While cryptocurrency is noted for using blockchain technology, other evolving uses include online voting, medical records, insurance policies, property and real estate records, copyrights and licenses, and supply chain tracking.
Arizona: Authorizing Cryptocurrency Payments
Arizona lawmakers introduced Senate Bill 1127 in January of 2022. The legislation would allow for a state agency to enter into an agreement with a cryptocurrency issuer to provide a method to accept cryptocurrency as a payment method for fines, civil penalties, or other penalties, rent, rates, taxes, fees, charges, revenue, financial obligations and special assessments to pay any amount due to that agency or the state.
If passed, the legislation would be effective from and after December 31, 2022.
Hawaii: Task Force to Study Cryptocurrency and Blockchain
SB 2695 was introduced by Hawaii lawmakers in January and was scheduled for a public hearing on February 7, 2022. The bill would establish the Blockchain and Cryptocurrency Task Force within the Department of Budget and Finance.
The Task Force would be tasked with reviewing data on the scope of blockchain and cryptocurrency through the country, compile an overview of potential legislation on regulating cryptocurrency, solicit ideas and opinions of industry experts on additional legislation, and submit a report with findings and recommendations, including proposed legislation, to the legislature no later than 20 days prior to convening the 2023 legislative session.
Massachusetts: Special Commission on Blockchain and Cryptocurrency
H. 126, introduced by state lawmakers in 2021, would establish a special commission on blockchain and cryptocurrency.
The commission, which would consist of 20 members, would investigate the issue of blockchain technology and cryptocurrency and develop a master plan of recommendations for fostering the expansion of blockchain technology and the cryptocurrency industry as a whole in Massachusetts.
The legislation tasks the commission with examining the feasibility, validity, and admissibility as well as risks and benefits of using blockchain technology in state and local government and Massachusetts based businesses. Specifically, areas to be examined would include government records and delivery of services, court proceedings, statewide registries such as those for firearms, marijuana and opiates, and election nomination papers, voter records and election results.
The bill has not passed, but was scheduled for a virtual hearing in October of 2021.
Pennsylvania: Legislation Looking at Studying Cryptocurrency and Blockchain Technology
Lawmakers in the Keystone State have introduced at least two pieces of legislation aimed at studying and regulating cryptocurrency.
House Bill 1724 would establish the Digital Currency Task Force. The Task Force would be tasked with conducting a study on digital currency, cryptocurrency, and blockchain industries, hold public hearings, and submit a report on its findings.
House Resolution 121 would meanwhile establish a Blockchain Working Group, tasked with developing a master plan for the expansion of the blockchain industry in Pennsylvania and recommend policies and state investments in connection with blockchain technology.
Tennessee: Regulating Cryptocurrency and Blockchains
Tennessee lawmakers have introduced various pieces of legislation in the 2022 session aimed at regulating cryptocurrency and blockchains.
HB 2644 and SB 2882 would authorize a county, municipality, or the state itself to invest in cryptocurrency, blockchains, and non-fungible tokens (NFTs).
HB 2643 and SB 2855 would establish the blockchain and cryptocurrency study committee. The committee would be tasked with reviewing data and information on the scope of blockchain and cryptocurrency around the country, determine the current status of blockchain and cryptocurrency as it relates to the laws in Tennessee, study NFTs, solicit ideas and opinions from industry experts, and compile n overview of potential legislation with recommendations on which legislation would help make Tennessee “the most forward thinking and pro-business climate state for blockchain and cryptocurrency and foster a positive economic environment for blockchain and cryptocurrency.”
Under the bills, the committee would be required to submit an interim progress report to the legislature by December 31, 2022 and a final report to the legislature, Commissioner of Commerce and Insurance, and the Commissioner of Financial Institutions, by December 21, 2023. The Committee would disband following their final report.
Virginia: Subcommittee to Study Blockchain and Cryptocurrency
At the end of January, a Virginia House subcommittee recommended laying HJ 30 on the table by a vote of 6-0. HJ 30 would establish a joint subcommittee to study the emergence and integration of blockchain technology and cryptocurrency in Virginia’s economy.
The subcommittee would be tasked with analyzing and considering economic development opportunities in Virginia through the utilization of blockchain technology, different types of blockchain technology, and the feasibility of economic development for each type, the creation of a statewide, comprehensive, and coordinated strategy to encourage commercial activity in the blockchain sector, opportunities for deploying blockchain technology in state and local government, strategies to incentivize the development of blockchain companies within Virginia, a potential structure for regulating blockchain technology, and the impacts blockchain technology would have on poor and working class families.