Every month, itBit scours the globe to bring you the most important digital currency regulation news and updates. For past articles, check out the full Global Digital Currency Regulatory Roundup archive.
May was a quiet month around most of the world when it came to Bitcoin regulatory activity. But in the United States, many states were busy working to strengthen existing digital currency legislation or, in the case of New York, break new regulatory ground.
The New York State Department of Financial Services granted itBit a trust charter, making itBit the first and only regulated bitcoin exchange able to accept US customers nationwide. Read more about itBit’s US launch and trust charter.
Connecticut’s House of Representatives passed a bill that would give state regulators greater power to oversee the use of digital currency within the state. Namely, the bill would require any business attempting to get a money transmission license from the Connecticut Banking Department to more specifically define any plans for offering digital currency. State regulators would then have the power to approve or deny the request based on their analysis of the risk associated with the businesses plans for digital currency use, even if the applicant is otherwise qualified.
According to the bill’s language, “The bill allows the commissioner to place additional requirements, restrictions, or conditions on the license of an applicant involved with virtual currency.” The bill will still require approval in the Senate and approval by the state’s Governor.
The state’s House of Representatives is pushing a bill that would seek to enhance regulation of digital currencies such as Bitcoin. House Bill 289 would effectively replace older language that addresses money transmission outside of business purposes and create a new Money Transmitters Act.
When asked about the new bill, a representative from North Carolina’s Commissioner of Banks told Coindesk, "Like existing law, the bill requires bitcoin transmitters to obtain a license from our office. The Bill, however, clarifies that only virtual currency transmission involving a personal, family or household purpose (as opposed to business-oriented transmission) is subject to the Money Transmitters Act. It also defines virtual currency consistently with federal financial regulation."
Officials in California made contradictory statements about the future of digital currency regulation within the state. The California Department of Business Oversight was initially quoted by Bloomberg as saying that they would not pursue regulating digital currencies such as Bitcoin, but would instead pass the task off to the state legislature.
Soon after, a DBO spokesperson walked back the proclamation in a conversation with Coindesk saying, "We haven't made a decision. We're still in the process of how or if at all to regulate virtual currency business under our current statutory scheme." No formal decision about digital currency regulation within the state has yet been made public.
A new proposal in New Jersey calls for the state legislature to approve tax breaks for Bitcoin businesses in the name of job creation.
The bill, known as the Digital Currency Jobs Creation Act, seeks to create a regulatory framework around digital currencies but to also create incentives and tax opportunities that would make it easier for the industry to thrive and grow within the state. "I want to encourage innovation here in New Jersey. I think there's an opportunity for job creation," said Assemblyman Raj Mukherji, who introduced the bill along with a colleague.
Part of the bill would allow for currency miners to receive tax breaks on energy and utility bills. Language from the bill reads, “Receipts from retail sales of energy and utility service to a digital currency servicer or a company registered under 'The Digital Currency Job Creation Act' for use or consumption directly and primarily in the creation of digital currency, including mining, shall be exempt from the tax imposed under the 'Sales and Use Tax Act.'”
Around the Globe
Russia has lifted their ban on Bitcoin online information. Earlier in the year the Roskomnadzor, Russia’s equivalent of the FCC in the U.S., banned access to a number of top bitcoin websites. The reversal of the ban may be a moot point if the Russian government proceeds with fully banning the use of Bitcoin.
Sweden has implemented formal tax regulations for Bitcoin mining operations. Miners will be taxed if they meet any of the following criteria put forth by Sweden’s Tax Authority:
Carry out the mining in a professional and cost-efficient manner over a longer period with appropriate equipment.
The activity is expected to create a surplus as measured over the full financial calculation period.
The computing capacity can be expected to generate more than 25 bitcoins a year (or the equivalent value in form of transactional fees or other virtual currency).
These taxes set a baseline for the Swedish government in regulating digital currencies going forward.