Several Nevada Stakeholders Oppose Uniform Virtual Currency Bill

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The path toward decentralization is paved with good intentions. Scratch that – it's paved with well-intended lawmakers who seek to uniformly regulate the ever-evolving blockchain and cryptocurrency industry but, in doing so, may unintentionally stifle its growth and introduce layers of centralization.

A Tuesday, March 12, hearing in the Nevada Senate's Committee on Judiciary exemplifies this sentiment. State Senator James Ohrenschall (D) presented SB195, a bill to enact the Uniform Regulation of Virtual-Currency Businesses Act and the Uniform Supplemental Commercial Law.

This two-pronged proposal represents the Uniform Law Commission's (ULC) attempt to consistently regulate "virtual-currency business activity" across the United States. Such activity, according to the ULC, ranges from the exchange, transfer, and storage of virtual currencies to holding electronic precious metals. Under SB195, businesses engaging in these activities would need to register with Nevada's Department of Business and Industry, which would ensure that the state's registrants adhered to the act's requirements.

Also introduced in the legislatures of California, Oklahoma, and Hawaii, the proposal was ultimately drafted to protect consumers. The ULC believes the act would "afford protections for custodial customers" of virtual currencies while also providing a flexible licensing scheme for registrants. Indeed, the commission wants to make these "protections similar to those of customers of regulated banks, broker-dealers, and traditional money transmitters."

Multiple stakeholders in Nevada, however, do not see SB195 this way. Elisa Cafferata, executive director of the Nevada Technology Association, testified in opposition to the bill. During her testimony, she asserted that SB195 was premature, adding that it was too early to adopt a uniform virtual currency law. She also noted that the requirements set forth in the bill would hinder the progress of the state's blockchain companies.

Matt Digesti, vice president of government affairs and strategic initiatives at Blockchains LLC, testified in opposition as well. (Disclosure: ETHNews is a division of Blockchains Management Inc., which is the parent company of Blockchains LLC.) Besides echoing Cafferata's sentiment that the bill was premature, Digesti said the lack of Nevada stakeholder involvement during the bill's drafting was problematic; no blockchain- or cryptocurrency-related startups were asked to provide input regarding SB195. Further, he was concerned with the bill's potential reach, noting that the proposed act's policies might extend to any digital token.

Other opponents at Tuesday's hearing included Figure Technologies, Hosho, and Filament, three blockchain companies operating in Nevada. Wendy Stolyarov, director of government aff ...

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Tags: Nevada Legislature, Virtual currency, Blockchain, bill, Currency, stakeholder, Uniform Commercial Code, Uniform Law Commission, uniform, Elisa Cafferata