Virtual currency advocates provided input to a North Carolina legislative committee Tuesday on a proposed rule to improve regulation of digital currency and blockchain related businesses.
The Chamber of Digital Commerce, a trade association that promotes digital assets and blockchain technology, joined representatives of IBM and the Perkins Coie law firm in meeting with the North Carolina Senate Finance Committee.
The state House of Representatives passed the North Carolina Money Transmitter Act in May by a 117-to-1 vote after being introduced in March at the Commissioner of Banks’ request. The proposed law would add the term “virtual currency” to the existing law. It will also clarify what activities trigger licensure under the law.
The Chamber of Digital Commerce believes the existing law’s language is ambiguous, especially for companies using the technology for applications besides payments. The new law clarifies the licensure requirements for several business models related to virtual currency.
The proposal also distinguishes between companies that use virtual currency and those using distributed ledgers.
The chamber believes the proposed law defines what types of companies working with blockchain technology need to be licensed as money transmitters. It further includes an exception for the agent of the payee. The exception would be available to all potentially regulated entities, not just those related to virtual currency. The chamber also believes the proposal is a more business-friendly regulatory approach, one that contrasts with New York State’s.
Perianne Boring, the chamber’s founder and president, said the state-by-state money transmitters licensing regime is onerous, labor-intensive and costly for companies. “The passage of this act into law is good for business, jobs and innovation in North Carolina,” Boring said. “We urge senate leadership to take the next steps to bring it to the floor for a vote.”
Carla Reyes, an associate at Perkins Coie LLP and an incoming law faculty member at Stetson University College of Law, said the proposed law is a thoughtful approach to virtual currency regulation. Reyes noted the law reflects ongoing efforts of the Uniform Law Commission and previous work by the Conference of State Bank Supervisors.
“The importance of clarity provided through legislative action for members of the industry cannot be overstated, and the act offers both that clarity and other important updates to North Carolina money transmission law,” said Reyes.
Featured image from Shutterstock.