Governments around the world are rushing to adapt to the new financial and technological realities created by cryptocurrencies and blockchain technology. Here in the U.S., most of the attention tends to be focused on the hearings and debates held in Washington, D.C., but the most exciting and interesting legal and regulatory developments aren’t taking place at the capital. Instead, the really innovative stuff is happening at the state level. In this post, we’re taking a look at five of the most most cryptocurrency and blockchain technology friendly U.S. states.
1. California: There’s a reason that major cryptocurrency players like Coinbase, Blockstream, Ripple Labs, and Kraken all claim California’s Silicon Valley as their home base. In addition to serving as a magnet for the world’s best tech talent, the area is also famous for its startup-focused, multi-billion dollar investment culture. In 2014, California also became one of the first states to fully legalize cryptocurrency transactions. The state currently has several blockchain and cryptocurrency-related bills under consideration.
2. New York: Few topics are as controversial within the cryptocurrency industry as New York’s “BitLicense” regulation. When the regulatory framework for cryptocurrency-focused businesses came into effect in 2015, it quickly resulted in a so-called “Great Bitcoin Exodus” of startups from the state. But not every promising startup fled New York for greener pastures, and many of those who stayed soon found themselves being courted by some of the Big Apple’s biggest investors. Why? Established financial firms often view regulations and oversight as a good thing, as it offers them a degree of security and clear rules for building future infrastructure. As a result, New York City is now home to some major cryptocurrency companies, including Digital Asset Holdings, Gemini, and R3.
3. Colorado: In 2018, the citizens of Colorado elected one of the most pro-cryptocurrency, pro-blockchain, and pro-technology voices in Congress, former Rep. Jared Polis, as their new governor. Almost immediately, Polis began supporting new laws — such as 2019’s Colorado Digital Token Act — that aim to bring the state into the blockchain era through new technologies and better financial regulations. Several cryptocurrency and blockchain bills are currently being considered by Colorado’s lawmakers.
4. Ohio: Over the last several years, Ohio has become a somewhat unlikely innovator in blockchain and cryptocurrency regulation. In 2018, for instance, the state launched a tax-payment portal — OhioCrypto.com — allowing companies to pay a wide range of taxes directly in bitcoin. Lawmakers in the Buckeye State have also proposed using blockchain technology for public documents, such as marriage licenses and birth certificates.
5. Wyoming: One might not expect that the least-populous state in the U.S. is also on the forefront of cryptocurrency regulation. Then again, Wyoming has a long history of pushing back against regulatory trends, making it fertile ground for blockchain and cryptocurrency advocates. In 2018, House Bill 70 — also known as the Utility Token Bill — became law in Wyoming, openly disputing the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) ruling that all cryptocurrencies should be treated as securities. The new law creates an entirely new class of investment — utility tokens — which are no longer considered a type of security or commodity. Several additional blockchain and cryptocurrency bills are currently being considered by Wyoming’s single-chamber state legislature.