Utah is the latest state in the United States to vote on special treatment for blockchain in a bill that will be heard today. The hearing will center on the definition of blockchain technology.
Introduced by Republican senator Daniel Hemmert on February 26th, the bill, called the “Blockchain Technology Act” (or, Bill 0213) seeks to make blockchain businesses exempt from money transmitter compliance obligations.
Listed under “highlighted provisions,” the bill:
- “Defines and clarifies terms related to blockchain technology
- Exempts a person who facilitates the creation, exchange, or sale of certain blockchain technology-related products
- Creates a legislative task force to study the potential applications of blockchain technology to government services, review current uses of blockchain technology by governments in other states and countries, recommend a pilot project for blockchain technology in Utah at a state or municipal level, review commercial applications of blockchain technology for future economic development in Utah”
This task force will, “on or before November 30, 2019… provide a report on the task force’s findings and recommendations, including any proposed legislation to… the Business and Labor Interim Committee; and… the Legislative Management Committee.”
Currently, the plans proposed by the bill are before the Senate Transportation, Public Utilities, and Technology Committee.
In considering such a progressive bill, Utah follows in the footsteps of Wyoming, which in January proposed a bill that would define cryptocurrency as money. This means crypto would be treated exactly the same as fiat currency in the eyes of the law, which has huge implications for tax law, as well as banks’ ability to act as custodians. Also in January, Wyoming approved a “sandbox bill” that would allow startups to test new technologies (including blockchain-based technologies, but not limited to them) to see how they would function within existing regulatory structures.
By proposing blockchain- and crypto-friendly legislation, the hope of states like Wyoming, and now Utah, is that businesses who employ these technologies will be incentivized to move and grow their businesses there, increasing tax revenue. Additionally, employing the technology to the states’ own operations could potentially enhance their ability to function and serve its citizens.