After approving a bill placing Bitcoin and other digital cryptocurrencies under the authority of the state’s financial regulatory commission, North Carolina lawmakers are now putting the brakes on the plan.
House Bill 289, the North Carolina Money Transmitters Act, would require state licenses for Bitcoin transmission, mandating the purchase of $150,000 in surety bonds to guarantee fulfillment of transactions.
The state’s House of Representatives approved the Money Transmitters Act in May, but the North Carolina Senate has repeatedly withdrawn the bill from consideration. Since its introduction in the Senate in May, the Money Transmitters Act has been re-referred to four separate committees.
More Laws Needed?
State Rep. Jon Hardister (R-Greensboro), a co-sponsor of the bill, says the proposed regulations are necessary to protect consumers.
“[The bill] updates laws related to the virtual money transmitters, which haven’t been updated in more than a decade,” Hardister said. “With changes in technology, it is necessary to periodically update laws related to Internet-based industries.
“The bill, which is supported by the North Carolina commissioner of banks, is intended to provide proper oversight of online money transmitters,” Hardister said. “The goal is to ensure basic consumer protections. It is a very technical bill, which has resulted in a lot of discussions. Committee members want to make sure the bill is written properly before moving it forward, which is understandable.”
Profit Motive
Norbert Michel, a financial regulatory research fellow with The Heritage Foundation, says lawmakers should question the need for more rules.
“I always ask, when I hear that, ‘Protect from what?'” Michel said. “It’s hard to say exactly, with 100 percent certainty, with these sorts of things, but [with] most of the Bitcoin transactions that take place, if it takes place by a company, the incentive is to do what the customer wants.”
Michel says there is little incentive for businesses to steal from consumers, and there are already laws against theft and fraud, and hence little to no reason for special rules for digital currencies.
“What are they saying?” Michel said. “Are they saying that a company has gone into business to steal something from someone? I don’t think that would be the case. That’s why we have civil fraud penalties. We have laws against theft.”
Andrea Dillon ([email protected]) writes from Holly Springs, North Carolina.
Internet Info:
Gerald P. Dwyer and Norbert J. Michel, “Bits and Pieces: The Digital World of Bitcoin Currency,” The Heritage Foundation: https://heartland.org/policy-documents/bits-and-pieces-digital-world-bitcoin-currency/
