New Jersey bill seeks to regulate digital currency firms

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New Jersey is seeking to join the neighboring state of New York in establishing a regulatory framework for the digital currency industry. The state’s Senate has introduced a bill that seeks to lay down the regulations by which all firms in the state handling digital currencies must abide.

The new bill is known as the ‘Digital Asset and Blockchain Technology Act.’ Introduced last week and sponsored by Senator Nellie Pou, it seeks to bring digital currencies under the oversight of the state’s Department of Banking and Insurance.

It lays out, “A person shall not engage in a digital asset business activity, or hold itself out as being able to engage in a digital asset business activity, with or on behalf of a resident unless the person is licensed in this State by the department, or has filed a pending license with the department; or licensed in another state to conduct digital asset business activity by a state with which this state has a reciprocity agreement.”

The Department will have the power to authorize a business to receive a digital asset for transmission, offer custody of digital assets on behalf of others, buy and sell digital assets as a customer business, perform exchange services and issue a digital asset. It will also authorize a business to borrow or lend—or facilitate the borrowing or lending of—digital assets.

“A person who violates this section shall be liable for a penalty of $500 per day, from the first day the department issues a notice of failure to apply a license until a license application is filed with the department.”

To secure a license in New Jersey, a digital asset service provider will have to provide the legal name of the business and all executives. It must also provide a concise description of its business activities for the past five years as well as a list of any disciplinary action it has faced.

All successful license applicants will have to apply for a renewal annually.

The bill was first introduced in February this year by Assemblywoman Yvonne Lopez. As the state noted at the time, neighboring New York’s tough requirements for digital currency service providers had forced many businesses to migrate to New Jersey.

See also: U.S. Rep. Darren Soto keynote talk at CoinGeek Live on Balancing Innovation & Regulation for Growth of Blockchain Technology