Pennsylvania has become the latest state to enact laws aimed at providing some regulatory clarity on digital assets with the new Bitcoin Rights Bill. State legislatures and governors are increasingly taking action to set guidelines for the US crypto industry.
This move comes amidst prevailing uncertainty at the federal level over crypto regulation and the appropriate federal agencies responsible for enforcing fundamental investment rules in the still-developing $2 trillion digital asset market.
Pennsylvania Leads the Way with Bipartisan Bitcoin Rights Bill
The Pennsylvania House of Representatives has passed House Bill 2481, also known as the Bitcoin Rights bill. It establishes protections for resident rights to self-custody digital assets, allows the use of Bitcoin payments, and clarifies the taxing of Bitcoin transactions.
The bill saw considerable bipartisan support, with a convincing majority of 176 to 26 votes. Voting on the bill included 76 Democrats and unanimous support from the 100 Republican members.
The bill, which now heads to the Republican-led Pennsylvania Senate after the upcoming election, would be sent to Governor Josh Shapiro if approved.
https://twiter.com/Terrence_STR/status/1849500958952390847
The Bitcoin advocacy group Satoshi Action Fund drafted the bill to better educate lawmakers on the inner workings of the blockchain and Bitcoin. SAF has been instrumental in helping to craft and advance identical legislation in 20 other states. Four of them have already become law: Oklahoma, Louisiana, Montana, and Arkansas.
Its primary mission is to promote Bitcoin at the state level and push lawmakers toward setting clear regulations for crypto. It’s something the federal government has yet to do to normalize it as a transaction method.
Can Pennsylvania’s Crypto Bill Bridge the Political Divide?
While some state statutes relating to financial instruments for small investors are controversial, federal authority over means of payment often preempts state law. The federal government has yet to weigh which digital currencies, beyond Bitcoin and Ethereum, are securities. Also they need to check which fall within the disclosure requirements mandated by the SEC.
A separate federal agency, the Commodity Futures Trading Commission, regulating cryptocurrencies as commodities, applies a lighter touch than other regulatory bodies. Recently, its Chair Behnam urged Congress to act on crypto regulations and election betting laws, highlighting gaps in current frameworks at the SIFMA annual meeting.
This crypto regulation has become a highly political issue in this election year. Republicans—including their presidential nominee, former President Donald Trump—are pushing for tighter regulations. These should appeal to perhaps 50 million Americans who believe the Biden Administration’s strict regulatory approach has stifled innovation.
Exactly in this state, a pro-Bitcoin Political Action Committee called Bitcoin Voters PAC recently created a campaign ad for Trump.
Republican bill’s sponsor, and a long-time Bitcoin investor Rep. Mike Cabell, said:
“In such polarizing times, it is great to see both sides of the aisle come together to further innovation and prioritize security for Pennsylvanians who own and transact with cryptocurrency.”
Crypto ownership is hot in Pennsylvania, with 1.5 million residents holding some form of digital asset.
Lawmakers Bridge Divide, Embracing Bitcoin Rights
Pennsylvania stands out as the only state with a split legislature. That means no single party has full control, which requires bipartisan support for bills to advance.
The strong bipartisan reception of the Bitcoin Rights bill in the Democrat-led lower chamber, has backing from Republicans and, gives hope to Cabell for another successful outcome.
Cabell remarked:
“A bill focused on the right to financial freedom should have bipartisan support. The 26 votes against it came from members who either lack a solid understanding of blockchain technology or have concerns about Bitcoin’s environmental impact.”
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