Ohio, Wyoming, Pennsylvania and Indiana all have something in common. They understand the importance of blockchains and cryptocurrencies. The states have all either implemented or are considering legislation to pave the way for crypto use and are now joined by another state, Utah. A bill being considered by lawmakers in the state would exempt blockchain companies from being defined as money transmitter companies, freeing them from the binds of the federal Money Transmitter Act (MTA).
Senate Bill (SB) 213, “Blockchain Technology Act,” was introduced last week by Senator Dan Hemmert. It reads, in part, “This bill defines and clarifies terms related to blockchain technology…exempts a person who facilitates the creation, exchange, or sale of certain blockchain technology-related products from Title 7, Chapter 25 Money Transmitter Act.”
The bill would create a legislative task force called the “Blockchain Pilot Evaluation Task Force,” which would be responsible for drafting blockchain legislation and for studying the technology to help Utah create state policies. It would include 12 members and would initially begin by researching blockchain’s potential in assisting the government with its duties.
After the study is complete, the task force would move on to review how the blockchain could be applied to commercial applications for economic development in Utah. That report would subsequently be delivered to the Senate Committee on Business and Labor and the Legislative Management Committee.
According to the MTA, money transmitters offer “the sale or issuance of a payment instrument or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad by any and all means, including payment instrument, wire, facsimile, or electronic transfer.” SB 213 looks to side-step that definition by specifically stating that a blockchain token is not a form of money transmission.
This past January, the Pennsylvania Department of Banking and Securities opened the doors for crypto services when it ruled that crypto exchanges and service providers are not required to solicit a money transmission license to operate in the state. It’s possible that Utah could be ready to follow the same path, but there is still a lot of debate in the U.S. regarding what digital currency truly is. North Carolina, for example, changed its MTA almost three years ago to assert that crypto is covered under the act.
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