As states enter their summer recess, the push for digital asset legislation continues to gain momentum, and it has the potential to become a significant factor in congressional and down-ballot races this fall.
In 2024, more than 30 bills related to digital assets have been passed at the state level, surpassing the number from the previous year. Both Republican and Democratic states have made progress in this area, indicating a bipartisan desire for clear and consistent regulation of cryptocurrencies. States are recognizing the need to address this issue before the November elections.
The month of June has been particularly active for crypto policy in New England, where important races are taking place. Several bills have been introduced to address various aspects of the digital asset industry, including custody requirements, self-hosted wallets, unclaimed property, crypto mining, and central bank digital currencies (CBDCs).
For instance, the swing state of New Hampshire, which has seen alternating Democratic and Republican majorities in its state legislature, is working to expand its regulatory framework to include certain digital asset activities. The state legislature spent June reconciling differences between the House and Senate versions of HB 1241, which aims to extend money-transmitter laws to cover “virtual currency” transmission.
Maine, another potential swing state in the 2024 election, has also updated its regulations concerning digital assets. However, there are some problematic provisions related to self-hosted wallets that policymakers will need to address during the implementation process of the newly enacted LD 2112.
Massachusetts, the home state of Senator Elizabeth Warren, is also making progress in crypto legislation. House Bill 1641 seeks to modernize how fiduciaries manage digital assets, aligning with similar legislation in other states. The bill has been recommended for further study by the Joint Judiciary Committee.
At the local level, Massachusetts is also taking steps forward. The city of Quincy recently issued a municipal blockchain-based bond worth $10 million in collaboration with J.P. Morgan. This move is seen as a way to reduce costs, increase liquidity, and shorten settlement times in debt markets. Given Senator Warren’s influence on the federal level, it is important to monitor developments at the state level.
In June, Rhode Island saw Governor Dan McKee sign SB 2803 into law, which imposes capital requirements and investment limits on “currency transmitters,” including crypto exchanges. Similarly, Louisiana’s Governor Jeff Landry signed HB 488, which promotes Bitcoin mining and prohibits the use of CBDCs. These bills received bipartisan support for their focus on states’ rights in crypto policy.
A significant victory for crypto advocates occurred on June 27 when North Carolina’s HB 690 passed the state Senate. The bill prohibits CBDC payments and North Carolina’s participation in the Federal Reserve’s CBDC tests. It is now awaiting the governor’s consideration.
States are increasingly shaping the regulatory environment for digital assets, providing clarity and security for businesses and consumers in this sector. The growing legislative activity at the state level shows that policymakers are listening to their constituents on these issues, which will have implications for the upcoming November election. With over 50 million Americans owning crypto, these “crypto swing voters” could have a major impact on tight races in swing states.
These voters understand that the United States is at a crucial moment in terms of leadership in Web3 technology, and they don’t want to see the country lose ground to global competitors. Candidates who support clear regulations and the advancement of this technology in the United States have the potential to win closely contested races across the country. The activity seen in June at the state level proves that policy leaders can emerge from anywhere in the country and from either political party.
Peter Herzog, the state and local government relations lead at the Crypto Council for Innovation, emphasizes the importance of these developments in shaping the future of digital assets. However, it is essential to note that this article is for informational purposes only and should not be considered legal or investment advice. The views expressed are solely those of the author and do not necessarily represent the views of Cointelegraph.