A two-year effort to unify cryptocurrency business regulations across the U.S. has concluded now, the technology’s enthusiastsjust have to convince legislators to enact it.
Established in 1982, the Uniform Law Commission (ULC) is a non-profit association made up of 350 commissioners. All are lawyers by trade, and theirgoal isto draft legislation that brings clarity to areas where state law is creating instability.
Given the onerous regulatory regimes that have so far been enacted for cryptocurrencies, it may be no surprise that the ULC has taken an interest in the area. Since the group began its work in 2014, attempts by states to regulate the tech have attracted everything from public boycotts to criticism and petitionsto ongoing lawsuits.
But with the ULC’s work now concluded, some industry observers are optimistic this narrative could see a much-needed reversal.
Stephen Middlebrook, an attorney with Womble Carlyle who served as the American Bar Association advisor to the ULC during its drafting process, expects several states to introduce itsUniform Regulation of Virtual Currency Businesses Actin upcoming legislative sessions around the country.
Middlebrook told CoinDesk:
“It’s my understanding that legislators in several states who were interested in legislating in this area held off waiting for the Uniform Act. So, I think there’s sort of a built up demand for it.”
Others involved with the work agree.
Sarah Jane Hughes, who served as reporter for the ULC committee, said Texas and California which were involved in the drafting process would likely be early adopters.
“We believe that there are a number of states that have been holding back their own regulatory and legislative approaches in order to wait for this,” she said.
The Uniform Act seeks to spell out which virtual currency-related activitiesare and are not considered money transmission, and therefore require licensure. It furtherdefines foundational conceptssuch as the “custody” of crypto assets.
One of the more innovative itemsthe bill seeks to put into law is a three-tier licensing structure that offers full exemptions for individuals and small entities, createsa regulatory sandbox for startups andgrants full licensure status for larger virtual currency businesses.
And legislators seem keen to continue engaging and working with the nascent industry.
Matt Dababneh, a member of the California state assembly who hasintroducedvirtual currency legislation in the past, told CoinDeskhe is considering the Uniform Act, explaining:
“I have been monitoring the growth and progression of virtual currency and how it impacts our economy. I am still reviewing all of the recommendations put forth in the [Uniform]Act. I will continue to be engaged in this issue as virtual currency becomes a more prominent payment option for businesses throughout the state.”
With all this optimism, though, there’s still an uphill battle ahead.
According to Carol Van Cleef, a fintechattorney with BakerHostetler, getting the law passed in any single state, much less all 50, will be a challenge. And there’s history to prove it.
About 17 years ago, a uniform money transmitter statute was circulated, with the idea that money transmitters would only need to receive a license from one state, which could then be used as a passport to operate in other states, said Van Cleef.
“As of today, I think approximately 10 states have adopted that. So, we’re not going to see this as a real panacea, or think that were resolving the state money transmitter issue,” she said at a conference last month in Washington, D.C.
Complicating matters further, a segment of the virtual currency community remains stridently opposed to the Uniform Act on the grounds it too closely resembles New Yorks “BitLicense” regulation, which they claim has chased fintech innovators out of the state.
The Bitcoin Foundation, a non-profit of waning influence in the industry, has urged the National Council of State Legislatures (NCLS), a group that represents state legislators and staff, to direct its members to reject the bill.
Writing to the NCLS, the foundation’s executive director Llew Claasen warned:
“Adopting a model act with the characteristics of the New York regulation is sure to threaten the existence of the fintech industry nationwide.”
And theremight be merit in these ideas.
Given the fast-moving nature of cryptocurrencies and related technologies, laws like the BitLicense have shown a propensity to quickly become dated.
Since the law was drawn up in 2014, two separate movements have sprung out of the tech:bank-focused private blockchains and initial coin offerings both of which haven’t been addressedon the state level.
Still, Middlebrook advocated for a balance here, as both regulators and innovators seek to find a middle ground that can perhaps only be found with time.
“The choice really is whether it’s going to be regulated using statutes and regulatory schemes that were designed for other things that dont really mesh well with virtual currency, or whether a regulatory scheme is going to be something specifically designed for businesses operating in this area.”
U.S. dollar puzzleimage via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [emailprotected].
- Bitcoin Fees Have Become Infeasible - Bitcoin News - December 23rd, 2017
- Bitcoin's incredible surge takes it above $9,500 - Nov. 27 ... - November 27th, 2017
- Warning Signs About Another Giant Bitcoin Exchange - November 23rd, 2017
- What Is Bitcoin, and How Does It Work? - The New York Times - October 6th, 2017
- Why Beanie Babies make for a better investment than bitcoin - MarketWatch - September 5th, 2017
- Bitcoin's price hit $5000 last week. It's still a dumb investment - Los Angeles Times - September 5th, 2017
- Bitcoin dips another $300 after China's cryptocurrency crackdown - CNBC - September 5th, 2017
- IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments - Investopedia - September 5th, 2017
- Sequoia, IDG to Invest in China Bitcoin Mining Giant - Bloomberg - September 4th, 2017
- Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions - CoinDesk - September 4th, 2017
- Bitcoin $5,000: Currency Hits New Record High | Fortune.com - Fortune - September 2nd, 2017
- Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off - CoinDesk - September 2nd, 2017
- Searching for the future of currency, major companies try Bitcoin technology - PBS NewsHour - September 2nd, 2017
- Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required - newsBTC - September 2nd, 2017
- Literally just one huge chart showing bitcoin's incredible rise to $4800 - MarketWatch - September 2nd, 2017
- Bitcoin's nearly five-fold climb in 2017 looks very similar to tech ... - CNBC - September 2nd, 2017
- BTC-e's Big Claim: Bitcoin Withdrawals to Begin Tomorrow - CoinDesk - CoinDesk - September 2nd, 2017
- As bitcoin surges in price and popularity, so do the complaints - CNBC - August 31st, 2017
- Here is how Indians are minting a fortune in bitcoins - Economic Times - August 31st, 2017
- Why Miners Are Mining Bitcoin Cash and Losing Money Doing It - CoinDesk - August 30th, 2017
- Bitcoin jumps nearly 70% for August to record high, offshoot 'bitcoin cash' falls to more than one-week low - CNBC - August 30th, 2017
- Bitcoin Foundation seeks legal protection from US currency regulation - The Independent - August 30th, 2017
- Bitcoin's epic rise leaves late-1990s tech bubble in the dust - Economic Times - August 30th, 2017
- 99Bitcoins | Buy Bitcoin, Bitcoin Guides & Reviews for ... - August 29th, 2017
- Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies - CNBC - August 29th, 2017
- Bitcoin Meets Zcash: Developers Test Tool for Trustless Trades - CoinDesk - August 29th, 2017
- Russian Regulator: Bitcoin Should Be Limited to 'Qualified Investors' - CoinDesk - August 29th, 2017
- As bitcoin and rivals surge, so too have complaints to the CFPB - MarketWatch - August 29th, 2017
- Is Bitcoin the New Gold? - TheStreet.com - August 28th, 2017
- This Swedish guy bet all his life savings on bitcoin and it made him 100 times richer - Business Insider Nordic - August 28th, 2017
- How To Gain Bitcoin Exposure Inside Of Your Traditional Brokerage Account - Seeking Alpha - August 28th, 2017
- Value of all digital currencies hits record around $160 billion as ... - MarketWatch - August 28th, 2017
- Why Motherboard Is Capitalizing 'Bitcoin' Again - Motherboard - August 28th, 2017
- New Bitcoin.com Charts: The Bitcoin Ecosystem at a Glance - Bitcoin News (press release) - August 27th, 2017
- Expert Predicts Bitcoin Will be Worth up to $20000 in the Next Three Years - Futurism - August 27th, 2017
- Does Bitcoin Have a Mining Monopoly Problem? - Fortune - August 27th, 2017
- Bitcoin poised to challenge record after recovering from correction - MarketWatch - August 26th, 2017
- Bitcoin Prices Rise But Fall Short of All-Time High - CoinDesk - CoinDesk - August 26th, 2017
- Bitcoin and Artificial Intelligence Can Help Fight Sex Trafficking ... - Fortune - August 26th, 2017
- Bitcoin Investors, Beware: The IRS Is Coming for Your Vast Riches - TheStreet.com - August 26th, 2017
- Bitcoin's Lightning Network Moves Closer to Compatibility - CoinDesk - CoinDesk - August 26th, 2017
- A sketchy Satoshi has popped up to promote his new blockchain - The Verge - August 26th, 2017
- Bitcoin And Why You Think You're Right (Even When You're Wrong) - Seeking Alpha - August 26th, 2017
- Bitcoin and Ether rise, helping take crypto space above $150 billion market cap - MarketWatch - August 23rd, 2017
- Bitcoin Prices Are Up Over $100 Already Today - CoinDesk - August 23rd, 2017
- MGT Capital Raises $2.4 Million to Expand Bitcoin Mining Operation - CoinDesk - August 23rd, 2017
- Hackers Swipe Bitcoin by Stealing Your Cell Phone Number First - Inc.com - August 23rd, 2017
- Bitcoin rebounds after briefly entering correction territory - MarketWatch - August 22nd, 2017
- Here's Why Bitcoin Rose More than $1000 in Two Months - Futurism - August 22nd, 2017
- The IRS Has Special Software to Find Bitcoin Tax Cheats - Fortune - August 22nd, 2017
- Bitcoin Prices Dip Below $4000 to Hit 7-Day Low - CoinDesk - August 22nd, 2017
- China's two biggest bitcoin exchanges helped themselves to $150 million in idle client funds - Quartz - August 22nd, 2017
- Bitcoin Analysts Compete for the Highest Price Forecast - Bloomberg - August 21st, 2017
- Take Two: Bitcoin Miner BTCS Announces New Merger Deal - CoinDesk - August 21st, 2017
- Bitcoin About To Burst - Seeking Alpha - August 21st, 2017
- 10 Bitcoin Wallet Apps You Should Consider Using Today - HuffPost - August 20th, 2017
- Bitcoin-accepting shops leave cookie trail that crumbles anonymity - The Register - August 20th, 2017
- Bitcoin Trades Sideways as Bitcoin Cash Price Drops to $800 - CoinDesk - August 20th, 2017
- 'Bitcoin cash' surges 40% in single day as investors bet on its faster processing speeds - CNBC - August 19th, 2017
- 'Bitcoin cash' soars to record high above $900 as 'mining' profits jump - CNBC - August 19th, 2017
- Photos: Inside one of the world's largest bitcoin mines - Quartz - August 18th, 2017
- Bitcoin Surged to a New High Adding $17 Billion in Just Over a Week - Fortune - August 18th, 2017
- Another major country joins China and Japan in cracking down on bitcoin exchanges - CNBC - August 18th, 2017
- Bitcoin Cash Breaks Price Doldrums to Push Past $400 - CoinDesk - August 18th, 2017
- Poloniex and Breadwallet Will Support Bitcoin Cash Transfers - The Merkle - August 14th, 2017
- Bitcoin Price Flies To More Than $4100 Over Weekend - PYMNTS.com - August 14th, 2017
- Why is Bitcoin worth more than gold? - Independent Online - August 14th, 2017
- Bitcoin breaks $4000 - BetaNews - August 13th, 2017
- Bitcoin just passed $4000 - TechCrunch - August 13th, 2017
- Bitcoin vaults to new record above $4K, boosted by Japan and multiplying its value fourfold - CNBC - August 13th, 2017
- What is bitcoin? - CoinDesk - August 12th, 2017
- Bitcoin surges to fresh record above $3500, beats gold amid the global market sell-off - CNBC - August 12th, 2017
- 'Blockchain technology will change the world': Fidelity Labs SVP - CNBC - August 12th, 2017
- The Bitcoin Cash Hard Fork Will Show Us Which Coin Is Best - Fortune - August 12th, 2017
- Bitcoin Price Index - Real-time Bitcoin Price Charts - August 11th, 2017
- $5000 Bitcoin? 3 Reasons to Buyand to Stay Away - Fortune - August 11th, 2017
- Fundstrat's Tom Lee" Bitcoin will be the best asset through year-end - CNBC - August 11th, 2017
- Howard Marks, who has called past market bubbles, says 'I don't understand what's behind bitcoin' - CNBC - August 11th, 2017
- Commerzbank's Curious Way to Get Bitcoin Exposure Without Actually Buying It - Bloomberg - August 11th, 2017
- As bitcoin comes off its record high, the next step is to avoid a 'lightning fork' - CNBC - August 10th, 2017