Louisiana could be on its way to becoming the first state with a definitive digital currency licensing framework if a bill that’s currently on the floor of the state’s Senate sails through. The bill was approved unanimously by lawmakers in the House of Representatives.
Bill HB701 seeks to bring digital currency service providers under the purview of the Office of Financial Institutions (OFI). It was sponsored by Rep. Mark Wright, a lawmaker whose digital currency interest stretches back to 2019 when he called on the OFI to regulate the industry. He also introduced a bill on digital currency regulations which died at the hands of the Senate Committee on Commerce, Consumer Protection and International Affairs.
Wright’s new bill requires license applicants to submit legal names and addresses of all top executives, an account of the business for the past five years and a declaration of any previous criminal convictions for all the executives. If the firm has acquired any other licenses in the other states, they must disclose them as well.
The application shall cost the firm a $2,000 fee, with a $1,000 annual renewal fee.
After receiving all the required documents, the OFI shall investigate the financial condition of the applicants, their relevant experience, the general fitness of each executive and the business premises. In no more than 30 days, it shall reveal to the applicant whether his application has been approved or denied.
If the application is denied, the applicant can appeal the decision no later than 30 days after receiving notification of the denial.
Firms that have been licensed in other states whose regulations are similar to Louisiana’s will not have to go through the licensing process. Additionally, firms that deal with $35,000 or less in capital will not need to apply for the license; they’ll only require registering with the OFI.
The bill has come at the right time, Rep. Stephen Pugh believes. However, this is just a tip of the iceberg, he stated, noting that the state still has a lot to do if it’s to properly regulate the digital currency industry.
“We are so far behind on technology,” he stated.
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