Raleigh, N.C., Thursday, July 7, 2016 – Governor Pat McCrory has signed
House Bill 289 into law, marking a historical moment for States’ regulation of blockchain technology and virtual currencies. The ratification of the bill, also known as the North Carolina Money Transmitter Act, comes after 16 months of deliberations between the North Carolina Commissioner of Banks, the General Assembly and the Chamber of Digital Commerce.
The Act updates the state’s existing laws to include a defined “virtual currency” term, and clarification as to which activity using virtual currency triggers licensure under the Act. This will ensure that virtual currency miners and blockchain software providers including smart contracts platforms, colored coins, smart property, multi-signature software, and non-hosted, non-custodial wallets will not require a license.
“Decentralized cryptocurrencies represent a significant development in financial services, but, because of the uniqueness of the technology powering them, also pose challenges to regulators, lawmakers and law enforcement officials evaluating how to integrate them into the existing legal fabric,” says Dax Hansen, Partner at Perkins Coie LLP and Chair of the Chamber’s State Working Group.
“North Carolina should be commended for investing the requisite time to understand decentralized cryptocurrencies and thoughtfully address them in the updated Money Transmission Act.”
The result is a more business-friendly approach that invites companies seeking to use virtual currencies or the underlying technologies, like blockchains or distributed ledgers, to bring their businesses to North Carolina. This starkly contrasts New York’s separate licensing regime, and provides a firm direction and sensible alternative for other states exploring the best approach to regulation.
“It’s been a long journey, however the benefits for both business and consumers in North Carolina won’t take nearly as long to surface,” said Perianne Boring, Founder and President of the Chamber of Digital Commerce.
“North Carolina anticipated key issues, and developed a reasonable solution to address each concern. This has paved the way for other states to realize and embrace the incredible potential of these technologies.”
The Chamber is working in collaboration with several other states, the
Uniform Law Commission and the
Conference of State Supervisors as they develop their own approaches to virtual currencies and blockchain technology.
“North Carolina’s updated Money Transmission Act is important to the industry because it underscores that state’s commitment to understanding emerging technology and implementing thoughtful activity-based regulation of certain business models using such technologies,” said Carla L. Reyes, a Bruce R. Jacobs Visiting Assistant Professor of Law at Stetson University College of Law.
“Such careful consideration of the issues and the technology by regulators and legislatures is important for protecting the dual public policy interests of industry innovation and consumer protection.”
North Carolina’s MTA was a keystone initiative of the Chamber’s
State Working Group, which is comprised of over 20 member companies and six leading law firms.
The Chamber would like to thank the significant contributions of Joseph Cutler of Perkins Coie, Dax Hansen of Perkins Coie (chair of the State Working Group), Amy Kim of Buckley Sandler, Arika Pierce of Gide, Carla Reyes of Stetson University College of Law and Dan Spuller of Cryptolina.
“We applaud the North Carolina Commissioner of Banks for their thoughtful engagement and approach towards making this bill a reality,” said Perianne Boring.
