Regulatory policies are forming across many states in the U.S. concerning digital currencies. This week in North Dakota a bitcoin-related bill was unsuccessful moving forward during the state’s House of Representatives vote for Bill 2100.
North Dakota’s Bitcoin Bill
Last year North Dakota’s Business and Labor Committee created Bill 2100 in order to discover the “feasibility and desirability of regulating virtual currency, such as bitcoin.” The legislative proposal discusses subjects like money transmission, permissible investments, and licensure. Bill 2100 describes bitcoin as a medium of exchange, but one that is not recognized by the federal government, stating:
‘Virtual currency’ means a digital representation of value used as a medium of exchange, a unit of account, or a store of value, but does not have legal tender status as recognized by the United States government.
The digital currency and blockchain legislative advocacy group Coin Center initially criticized Bill 2100 for failing to define what “control” of bitcoins would mean. The organization noted the bill’s original text was amended and the advocacy group said they were pleased to see North Dakota take a “more cautious approach.”
Initially Coin Center took issue with Bill 2100’s legislative interpretations of money transmission control. Coin Center’s Peter Van Valkenburgh explains the legal definition is important to ensure permissionless networks and innovation is not stifled.
“We urge North Dakota to include that definition in their legislation, so that the law would not be amenable to interpretations treating infrastructure providers (multi-sig wallets, lightning network nodes, miners, or full nodes) as money transmitters thus requiring that these low-risk, non-custodial innovators be licensed,” details Coin Center.
Bill 2100 Fails During House of Representatives Vote
This past January Bill 2100 passed its way through the Senate’s voting proceedings. The Senate hearing for Bill 2100 passed unanimously with 46 votes and quickly found its way to the House of Representatives. On February 9, the House began its first reading of the virtual currency mandates referred by the Business and Labor Committee. During the second reading on March 1, Bill 2100 failed to pass with only four ‘Yeas‘ and an overwhelming 84 ‘Nays‘.
The North Dakota Bill failed similarly to the recent California virtual currency bill, which lawmakers may attempt to resubmit. Government officials in California said they would resubmit their legislative framework in 2017 and North Dakota’s Bill 2100 could also go back to the Senate, as well.
Digital Currency Legislation and Regulatory Burden Can Affect Bitcoin Businesses and Regional Customers
Bitcoin proponents are watching these legislative attempts and policies very closely hoping innovation will not be squelched. Regulations can cause burdens to bitcoin startups and customers residing in a particular region. For instance, Coinbase has recently announced it would be ceasing operations in Hawaii due to regulatory policy. Bitfinex explained they would not obtain a license to operate in Washington State. Furthermore, regulatory burden from New York’s Bitlicense had caused businesses to leave in droves. Many bitcoin advocates hope lawmakers take a more cautious approach.
What do you think about North Dakota’s bill? Let us know in the comments below.
Images courtesy of Pixabay, and the North Dakota House of Representatives.
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