Cryptocurrency regulation is evolving globally as usage by investors, companies, and even central banks grows. Regulatory activity is increasing as market participants look for clarity on chartering, licensing, fraud and financial crime risks, and consumer protections. A growing number of state and federal lawmakers, regulators, and officials are considering approaches to add clarity.
Some jurisdictions are more aggressive in regulating cryptocurrency and blockchain operations than others. For example, New York is widely known for its strict BitLicense framework, which is a requirement for businesses that facilitate transactions with virtual currencies. The regulatory regime seeks to protect consumers and uphold market integrity, but the high compliance costs of obtaining and maintaining a BitLicense deter many potential crypto businesses.
Other states take a more hands-off approach. For instance, New Mexico does not have dedicated laws targeting crypto, but businesses that are money transmitters must comply with the state’s Money Transmitter Act. This lack of rigidity in New Mexico’s crypto-specific regulations makes it easier for businesses to enter the market, but it can lead to ambiguity in compliance expectations. The state’s focus on consumer protection, however, ensures that market players must maintain high standards of transparency and security to maintain consumer trust.
Some states are looking to leverage the technology for public services, with Vermont and West Virginia utilizing blockchain in their voting systems and property records management, respectively. This type of state-driven innovation creates valuable testing grounds for the industry and highlights the need for consistency among state policies.
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