Louisiana passes Blockchain Basics Act

Louisiana passes Blockchain Basics Act, banning CBDC and protecting miners

Getting your Trinity Audio player ready...

Louisiana has become the latest American state to pass the Blockchain Basics Act, a law that protects digital asset owners and miners while banning the future use of a digital dollar.

The Act received bipartisan support in the House and the Senate before being forwarded to Governor Jeff Landry, who signed it into law. It takes effect in August.

Louisiana joins a growing list of states that have adopted versions of the Act, whose original draft was heavily influenced by the industry lobby group Satoshi Action Fund. This year, South Carolina, Ohio, and Mississippi kickstarted campaigns to pass the Act. Oklahoma, Arkansas and Montana have already passed the bill.

Louisiana’s version of the bill sets out some key provisions, among them a right for residents to self-custody their digital assets. It also guarantees their right to spend digital assets for payments without any additional legal requirements or barriers.

Like the other states, Louisiana also seeks to protect block reward miners. This includes allowing home mining as long as the miner observes existing laws, such as noise ordinances. Miners must also not be subjected to extra requirements that don’t apply to operators of ordinary data centers.

However, the law clamps down on foreign firms seeking to set up mining operations in the state. Louisiana has the third-lowest energy prices in the U.S. Once the law takes effect in a month, foreign-owned mining facilities will have one year to divest or shut down, or risk fines of up to $1 million.

Louisiana, North Carolina join anti-CBDC movement

The Blockchain Basics Act has consistently opposed CBDCs. In Louisiana, the law prohibits any governing authority from participating in any CBDC test and urges the state “not to support legislation, or other efforts, relating to the adoption of a central bank digital currency in the United States.”

Like other anti-CBDC efforts, the state cites privacy violations and an “unacceptable expansion of federal authority” as key reasons for opposing the digital dollar.

It adds that participating in digital dollar tests would “hand over to the Federal Reserve unprecedented control of the lives, freedoms, choices, and sovereignty of the people of Louisiana.”

Representative Mark Wright, who pushed the bill through the House, attacked the CBDC opposition, describing it as an attempt to digitize a broken system.

“Just as important, it could lead to serious limits upon freedom and political control that bitcoin and other assets can change. Our currencies or assets should reflect the values of our nation and society. Private property is one of the most important rights for people… we can’t let CBDCs change that element of our culture,” he told media outlets.

Just days after Louisiana, North Carolina’s General Assembly passed a bill that bars the state from accepting a CBDC. A day earlier, the bill had sailed through the state’s Senate in a 39-5 landslide vote.

House Bill 690 now heads to Governor Roy Cooper for his signature. Cooper’s approval is only a formality; since the bill had a 109-4 vote in the House—and collectively garnered the support of over three-fifths of lawmakers from both houses—the governor’s signature is ultimately inconsequential.

Like in Louisiana, North Carolina lawmakers claim a digital dollar would invade the people’s privacy.

Sen. Brad Overcash (R-Gaston), who was among the bill’s key proponents, claimed that with every transaction monitored by the federal government, a CBDC would allow prosecutors to invade any resident’s home without probable cause as they would be armed with their transaction history.

Watch: Finding ways to use CBDC outside of digital currencies

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.