A virtual currency business licensing bill (HB701) sponsored by state Rep. Mark Wright was cleared unanimously by the state House of Representatives and now has been forwarded to the Senate Committee on Commerce, International Affairs, and Consumer Protection.
If the bill is passed by the Senate, Louisiana would become the first state in America to approve crypto licensing for virtual currency businesses.
Rep Mark Wright has been a steadfast advocate of digital currencies. Back in 2019 itself, the Rep.Wright asked the OFI to study the various nuances of digital assets and regulations to govern their use. Back then, he introduced another crypto bill that failed to pass the House committee.
If HB701 is approved, crypto businesses would be required to apply to the state’s Office of Financial Institutions (OFI), pay a non-refundable fee, and submit their business premise along with experience, general fitness, and character for the investigation.
OFI estimated that the application charges could be around $2,000 and the annual renewal of the license would cost $1000. It is estimated that the bill would cost the state $150,000 in the first year and around $1.3 million over the next 5 years.
Individuals dealing with less than $35,000 in capital would not be required to obtain an operating license, and would only be required to be registered with the OFI.
The New Bill is Derived From Virtual Currency Business Act (VCBA)
The new virtual currency business licensing bill seems to be derived from the Virtual Currency Business Act (VCBA). VBCA has been drafted by the non-partisan Uniform Law Commission (ULC), which is known for drafting model laws.
These laws are meant to bring statutory uniformity across states and currently, Oklahoma, Hawai, and California are looking to implement a version of VBCA.
Andrew Hinkes, a lawyer by profession explained how ULC formulated laws work:
“The ULC releases model laws which sometimes are quickly adopted by multiple states and sometimes are not adopted at all.
State legislatures ultimately make policy decisions for their states and decide whether model laws are appropriate.”
However, the bill sponsored by Rep. Wright is significantly different from the ULC drafted VBCA bill.