Posted 2 years ago | by Ben Armstrong
New Bill to Regulate Cryptocurrencies Introduced in New Jersey
A new bill that requires cryptocurrency businesses to obtain a proper license to operate is being considered in New Jersey by the state legislature. On Feb. 20, The assemblywoman Yvonne Lopez suggested the Digital Asset and Blockchain Technology Act, which would change the way crypto businesses would operate in the state.
As a part of a legislation, new requirements will be established for virtual currency businesses and consumer-friendly protections would also be enacted.
Crypto firms would be required to disclose their legally registered names, Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) policies would be enforced, and their licensing and legal history would be required by the State of New Jersey’s Department of Banking and Insurance.
New Jersey Moves to Regulate Cryptos
Up to this point New Jersey has been without any sort of crypto regulations at a state level. The new regulations would change this, and make any company that deals with cryptos do more to open their businesses to the public.
“People see and hear about (Bitcoin) in their day-to-day lives, but most are not quite sure what it is. We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue to develop and expand in New Jersey.”
In addition, the bill requires crypto companies to disclose their terms and conditions for consumer accounts. This may open up compliant organizations for protection by the Federal Deposit Insurance Cooperation (FDIC), although this is pure speculation at this point.
Additionally, any company that applies for the new license in New Jersey would need to show a schedule of fees and the information concerning the risks of investing in digital assets.
More Regulations Coming
By introducing a bill for a state-level licensing scheme, New Jersey is following New York in requiring cryptocurrency firms to obtain special permission to operate.
New York financial regulators introduced the BitLicense in 2014, and made New York become one of the toughest jurisdictions in the union for cryptocurrency-related firms to operate. These sorts of regulations are not always good for the industry. While more regulations are needed, they should be harmonized at a federal level.
One of the problems with state regulations on new businesses that operate in innovative technologies is that they may not be in-line with federal regulations. This puts businesses in a tricky spot, as there are other locations that offer a unified regulatory structure (like Singapore).