Cryptocurrency 2020 Legislation

Heather Morton 12/31/2020

Hand typing on laptop with finance graphics

Digital or virtual currencies are a medium of exchange but are not regular money.

Unlike dollar bills and coins, cryptocurrencies are not issued or backed by the U.S. government or any other government or central bank. The lack of a physical token to count and hold may confuse some. Rather, Bitcoin and other cryptocurrencies are a form of digital currency used in electronic payment transactions—no coins, paper money or banks are involved; there are zero to minimal transaction fees; transactions are fast and not bound by geography; and, similar to using cash, transactions are anonymous.

Digital currencies are stored in digital wallets, which are software or apps installed by users on their computer or mobile device.

Each digital wallet contains encrypted information, called public and private keys, that is used to send and receive the digital currency. All digital currency transactions are recorded in a virtual public ledger called the “blockchain,” which is maintained by digital currency “miners.” These miners can be anyone, anywhere in the world, who is willing to invest in the specialized computer hardware needed to rapidly process complex computations. Miners are awarded digital currency, like Bitcoin, Ripple, Dogecoin, and Litecoin, in exchange for verifying each transaction and adding it to the blockchain.

Twenty states had legislation in the 2020 legislative session. Louisiana, New York and Wyoming enacted legislation. Louisiana created licensure requirements for virtual currency businesses. New York established the digital currency task force. As part of its legislation, Wyoming modified the means to perfect a security interest in virtual currency and digital securities.

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Cryptocurrency 2020 Legislation

State:

Bill Number:

Bill Summary:

Alabama

HB 177

Under existing law, virtual currency is not currently subject to ad valorem tax. This constitutional amendment will exempt virtual currency, herein defined, from ad valorem tax.

Alabama

HB 318

This bill exempts virtual currency, herein defined, from ad valorem taxation.

Alaska

None

 

Arizona

HB 2400
Passed House 2/26/20

Establishes the Blockchain and Cryptocurrency Study Committee.

Arkansas

None

 

California

AB 1489
Died pursuant to Art. IV, Sec. 10(c) of the Constitution 2/3/20

This bill enacts the Uniform Regulation of Virtual Currency Businesses Act. The bill prohibits a person from engaging in virtual currency business activity, or holding itself out as such, unless licensed or registered with the Department of Business Oversight, subject to a variety of exemptions. The bill defines “virtual currency” as a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender, except as specified. The bill defines “virtual currency business activity” as exchanging, transferring, or storing virtual currency or engaging in virtual currency administration, whether directly or through an agreement with a virtual currency control services vendor, among other things. The bill prescribes requirements for licensure, which would include provisions for recognition of a license from another state. The bill also prescribes an alternative process of registration for businesses that have an annual virtual currency business of less than a specified dollar amount, as defined. The bill establishes requirements for security, net worth, and reserves for licensed and registered businesses. Among other things, the bill prescribes requirements for examinations of these businesses, data sharing with other states, mergers and consolidations by licensees and registrants, and disclosures to be provided to customers. The bill grants the department specified enforcement authority over these businesses, including specified civil penalties. This bill also enacts the Uniform Supplemental Commercial Law for the Uniform Regulation of Virtual Currency Businesses Act, which provides rights to virtual currency businesses and their customers based on Uniform Commercial Code provisions. In this regard, among other things, the bill provides that a licensee or registrant, as described above, is a securities intermediary and that the control of virtual currency by the licensee or registrant for the benefit of the user creates a securities account of which the user is the entitlement holder.

California

AB 3090

This bill, on or before Jan. 1, 2022, requires the California Department of Tax and Fee administration to issue and deliver to the Legislature a report on how the state, cities, and counties could receive any cannabis tax amounts due by payment using stablecoins, as described.

Colorado

None

 

Connecticut

None

 

Delaware

None

 

District of Columbia

None

 

Florida

None

 

Georgia

None

 

Guam

None

 

Hawaii

SB 2594

Classifies digital assets under the Uniform Commercial Code. Specifies the manner of perfecting a security interest in digital assets. Authorizes banks to hold digital assets in their custody. Authorizes courts to hear claims relating to digital assets.

Idaho

None

 

Illinois

HB 4573

Amends the Revised Uniform Unclaimed Property Act. Provides that virtual currency is presumed abandoned if it is unclaimed by the apparent owner five years after the last indication of interest in the property. Provides that a provision regarding when a tax-deferred retirement account is presumed abandoned also applies to a tax-exempt retirement account. Provides that property held in a pension account or retirement account that qualifies for tax deferral or tax exemption may be presumed abandoned if, among other criteria, it is unclaimed by the apparent owner three years after the date the apparent owner becomes 72 (rather than 70.5) years of age. Provides that a business association that has no reportable property shall report to the state treasurer if the business association has: (1) annual sales of more than $1 million; (2) securities that are publicly traded; (3) a net worth of more than $10 million; or (4) more than 100 employees. Provides that the state treasurer does not need to notify the Department of Revenue of the names or Social Security numbers of apparent owners of abandoned property under certain circumstances. Provides for the identification of apparent owners of abandoned property using databases of the secretary of state and the State Board of Elections. Provides for the delivery of reportable virtual currency to the state treasurer. Makes other changes.

Illinois

SB 3153

Amends the Revised Uniform Unclaimed Property Act. Provides that virtual currency is presumed abandoned if it is unclaimed by the apparent owner five years after the last indication of interest in the property. Provides that a provision regarding when a tax-deferred retirement account is presumed abandoned also applies to a tax-exempt retirement account. Provides that property held in a pension account or retirement account that qualifies for tax deferral or tax exemption may be presumed abandoned if, among other criteria, it is unclaimed by the apparent owner three years after the date the apparent owner becomes 72 (rather than 70.5) years of age. Provides that a business association that has no reportable property shall report to the state treasurer if the business association has: (1) annual sales of more than $1 million; (2) securities that are publicly traded; (3) a net worth of more than $10 million; or (4) more than 100 employees. Provides that the state treasurer does not need to notify the Department of Revenue of the names or Social Security numbers of apparent owners of abandoned property under certain circumstances. Provides for the identification of apparent owners of abandoned property using databases of the secretary of state and the State Board of Elections. Provides for the delivery of reportable virtual currency to the state treasurer. Makes other changes.

Indiana

None

 

Iowa

SF 2079

This bill prohibits the state and its political subdivisions from accepting payments in the form of virtual currency. The bill provides the state and a political subdivision of the state shall only accept payment in the form of cash. The bill defines “cash” as U.S. currency, but excludes virtual currency from the definition, regardless of whether such virtual currency has an equivalent value in legal tender. The bill defines “political subdivision” as a city, county, township, or school district. The bill defines “virtual currency” as a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but is not legal tender in the United States. The bill also amends Code §8B.22, subsection 2, paragraph “a”, to indicate the office of the chief information officer, in establishing standards for the implementation of electronic commerce, is not to establish such standards for electronic currency. Instead, the office is to establish such standards for electronic payments.

Kansas

None

 

Kentucky

None

 

Louisiana

HB 701
Signed by governor 6/13/20, Act 341

Enacts Chapter 21 of Title 6 of the Louisiana Revised Statutes of 1950, to be comprised of R.S. 6:1381 through 1394, relative to virtual currency businesses; defines key terms; provides for applicability; requires licensure of virtual currency businesses; establishes requirements to apply for licensure; authorizes reciprocity of licensure; requires security deposits from applicants for licensure; provides for the issuance, denial, and renewal of licenses; authorizes registration in lieu of licensure; provides for enforcement; establishes penalties for violations; requires rulemaking; and provides for related matters.

Maine

None

 

Maryland

SB 754
Passed Senate 3/13/20

Adds certain sources of revenue required to be credited to the Nondepository Special Fund; requires the commissioner of Financial Regulation to pay certain fines and penalties into the General Fund of the state; alters certain provisions on the regulation of money transmission by the commissioner; authorizes the commissioner to identify certain activities as money transmission for certain purposes; establishes licensing requirements for certain money transmission locations.

Massachusetts

SB 200

Relates to blockchain and cryptocurrencies.

Michigan

None

 

Minnesota

HF 1236

Relates to forfeiture; limits vehicles and other property subject to forfeiture; provides for recovery of property by innocent owners; modifies participation in the federal equitable sharing program. Includes cryptocurrency in definition of money.

Minnesota

HF 2538

SF 2474

Relates to unclaimed property; codifies the Revised Unclaimed Property Act; appropriates money for unclaimed property compliance, includes virtual currency.

Minnesota

HF 2884

SF 3670

Relates to campaign finance; prohibits the solicitation or acceptance of a digital unit of exchange for political campaign purposes; provides civil and criminal penalties; proposes coding for new law in Minnesota Statutes, chapter 10.

Minnesota

HF 4571

Relates to forfeiture; limits vehicles and other property subject to forfeiture; provides for recovery of property by innocent owners; modifies participation in the federal equitable sharing program; requires reports; appropriates money. Includes cryptocurrency in the definition of money.

Minnesota

HF 31
2020 First Special Session

Relates to forfeiture; limits vehicles and other property subject to forfeiture; provides for recovery of property by innocent owners; modifies participation in the federal equitable sharing program; requires reports; appropriates money. Includes cryptocurrency in the definition of money.

Minnesota

HF 18
2020 Second Special Session

Relates to forfeiture; limits vehicles and other property subject to forfeiture; provides for recovery of property by innocent owners; modifies participation in the Federal Equitable Sharing Program; requires reports; appropriates money. Includes cryptocurrency in the definition of money.

Minnesota

HF 16
2020 Third Special Session

Relates to forfeiture; limits vehicles and other property subject to forfeiture; provides for recovery of property by innocent owners; modifies participation in the federal equitable sharing program; requires reports; appropriates money. Includes cryptocurrency in the definition of money.

Missouri

None

 

Montana

None

 

Nebraska

None

 

Nevada

None

 

New Hampshire

HB 470
Failed to pass House 1/8/20

This bill requires the state treasurer to develop an implementation plan for the state to accept cryptocurrencies as payment for taxes and fees and allows state agencies to accept payment in cryptocurrencies after July 1, 2020.

New Jersey

AB 1392

Regulates and establishes certain consumer protections concerning digital currencies.

New Jersey

AB 2155

This bill, the “Digital Currency Jobs Creation Act,” establishes a regulatory framework for digital currency businesses to operate in New Jersey and creates certain incentives for digital currency businesses to locate in the state.

New Jersey

AB 2189

SB 3132

Creates the Digital Asset and Blockchain Technology Act.

New Mexico

None

 

New York

AB 8686

SB 6792

Establishes the empire state inclusive value ledger establishment and administration act to create a master account and system of individual wallets to make and receive payments to state entities and residents of the state.

New York

AB 9508
Substituted 4/2/20
SB 7508
Signed by governor 4/3/20, Chapter 58

Enacts into law major components of legislation necessary to implement the state transportation, economic development and environmental conservation budget for the upcoming state fiscal year; addresses funds received and disbursed in response to the coronavirus public health emergency. Establishes the digital currency task force, in relation to extending the provisions of such chapter.

North Carolina

None

 

North Dakota

None

 

N. Mariana Islands

Not available

 

Ohio

HB 270
Passed House 6/11/20

Amends §§122.58, 126.37, 169.01, 169.02, 169.03, 169.05, 169.07, 169.08, 169.09, 169.12, 169.99, and 5703.21; enacts §§169.052, 169.091, and 169.18; and repeals §169.10 of the Revised Code to create the Unclaimed Funds Reform Act.

Oklahoma

SB 1666
 

Relates to virtual currency; defines terms; makes virtual currency exempt from state security laws under certain conditions; states conditions for exemption; sets criteria for meeting certain requirement; directs the secretary of state to develop and implement a filing system for certain notices; authorizes virtual currency as payment to any state agency and its political subdivisions.

Oklahoma

SB 1667

Relates to cryptocurrency; authorizes cryptocurrency to be used for purchases and payments under certain conditions; requires certain contract; provides for regulations; exempts banks and certain companies and firms; defines terms; requires token issuers to be money transmitters; states what cryptocurrency is not; directs the Oklahoma Department of Commerce to promulgate rules; directs certain consideration for rules.

Oregon

None

 

Pennsylvania

None

 

Puerto Rico

None

 

Rhode Island

HB 7989

This bill establishes an economic growth blockchain act, sets regulations for the sale of hemp, regulates virtual and digital assets and establishes depository banks for these purposes.

Rhode Island

SB 2777

This bill establishes an economic growth blockchain act, set regulations for the sale of hemp, regulate virtual and digital assets and establish depository banks for these purposes.

South Carolina

None

 

South Dakota

None

 

Tennessee

SB 2840

Establishes the legal nature of digital assets, includes virtual currency, within existing law, including the Uniform Commercial Code, and classifies such assets into categories of intangible personal property.

Texas

None

 

Utah

None

 

Vermont

None

 

Virginia

None

 

U.S. Virgin Islands

None

 

Washington

HB 1179

Revises and updates the Uniform Unclaimed Property Act.

Washington

HB 2234

Repeals chapter 63.29 RCW, the uniform unclaimed property act of 1983, and creates the revised uniform unclaimed property act. Includes virtual currencies.

West Virginia

None

 

Wisconsin

AB 200
Failed to pass pursuant to Senate Joint Resolution 1 4/1/20

This bill creates a sales and use tax exemption for precious metals and a sales tax exemption for cryptocurrency.

Wisconsin

AB 752
Failed to pass pursuant to Senate Joint Resolution 1 4/1/20

This bill adopts the revised Uniform Unclaimed Property Act, as approved by the Uniform Law Commission, also known as the National Conference of Commissioners on Uniform State Laws. Includes virtual currencies.

Wisconsin

SB 192
Failed to pass pursuant to Senate Joint Resolution 1 4/1/20

This bill creates a sales and use tax exemption for precious metals and a sales tax exemption for cryptocurrency.

Wisconsin

SB 756

This bill adopts the revised Uniform Unclaimed Property Act, as approved by the Uniform Law Commission, also known as the National Conference of Commissioners on Uniform State Laws. Includes virtual currencies.

Wyoming

HB 41

Relates to digital assets; specifies disclosure obligations applicable to private cryptographic keys.

Wyoming

HB 43

Relates to digital assets; defines the rights, duties and obligations associated with digital representation tokens; provides exceptions; and provides for an effective date.

Wyoming

SB 47
Signed by governor 3/13/20, Chapter 103

Relates to digital assets; modifies the means to perfect a security interest in virtual currency and digital securities; modifies provisions relating to security agreements involving virtual currency and digital securities; specifies factors relating to location of digital assets used as collateral; amends duties and requirements for banks that provide custodial services.

 

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Heather Morton is a program principal in Fiscal Affairs. She covers financial services, alcohol production and sales, broadband and telecommunications, and medical malpractice issues for NCSL.

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