Pennsylvania Becomes the Latest State to Pass Cryptocurrency Legislation
Pennsylvania has become the latest state to pass legislation clarifying regulations regarding digital assets, continuing the trend of national legislatures and governors attempting to provide some rules for the $2 trillion cryptocurrency market that is still in its infancy.
Amid ongoing confusion about federal-level cryptocurrency regulation and which federal agencies should take the lead in enforcing basic investment rules in the emerging $2 trillion digital asset market, the Pennsylvania House of Representatives passed a bill on Wednesday protecting residents’ right to self-custody digital assets, ensuring they can use Bitcoin as a form of payment, and providing clear guidelines on taxing Bitcoin transactions. The House Bill 2481, also known as the “Bitcoin Bill of Rights,” passed overwhelmingly with 176 votes in favor and 26 votes against, receiving unanimous support from all 76 Democratic members and all 100 Republican members.
The bill will now be submitted to the Republican-led Pennsylvania Senate after the elections and, if passed, will be sent to the governor for approval.
The legislation was drafted by the Satoshi Nakamoto Action Fund (SAF), an external Bitcoin advocacy organization, and represents the latest effort to help lawmakers understand the nuances of blockchain technology and Bitcoin. SAF has successfully assisted in the development and passage of similar legislation in 20 other states, with four bills in Oklahoma, Louisiana, Montana, and Arkansas becoming law. The organization’s primary mission is to help mainstream Bitcoin at the state level and encourage state legislators to do what the federal government has not yet done—provide clear rules for cryptocurrencies and normalize them as a mode of transaction.
Some state laws regarding the sale of financial products to small investors can be controversial, and federal jurisdiction around payment methods often overrides state laws. Meanwhile, the federal government has yet to define which digital assets, other than Bitcoin and Ethereum, qualify as securities such as stocks or bonds, and are subject to disclosure rules enforced by the U.S. Securities and Exchange Commission.
An independent federal agency, the Commodity Futures Trading Commission, is responsible for regulating cryptocurrencies, which are considered so-called commodities with more relaxed regulations. Cryptocurrency regulation has become a potent political issue in an election year, with Republicans and the party’s presidential candidate, former President Donald Trump, advocating for reduced rules to appease around 50 million Americans who believe that the strict regulation by the Biden administration hampers innovation.
In a statement, Pennsylvania Republican representatives said, “It’s good to see both parties coming together and further innovating and prioritizing the security of Pennsylvanians who own and use cryptocurrencies for transactions.” Mike Cabell, the initiator of the bill and a long-time Bitcoin investor, told FOX Business.
Cryptocurrency ownership in Pennsylvania is also growing rapidly, with 1.5 million residents holding some form of digital assets, accounting for about 12% of the state’s 13 million population.
As one of the most crucial battlegrounds in the upcoming presidential election, Pennsylvania has become a target of intense political spending by the U.S. government. The cryptocurrency industry hopes to sway the vote in favor of candidates who support them. With only two weeks left until Election Day, these 1.5 million cryptocurrency owners could play a significant role in the heated race, such as the Senate battle between incumbent Democratic Senator Trump and Vice President Kamala Harris.
The presidential campaign between Trump and Pennsylvania Vice President Kamala Harris is also heating up, with both candidates currently neck and neck in the polls.
“Pennsylvania is the most critical battleground state in the presidential race, and the outcome could depend on a small fraction of voters,” said Dennis Porter, founder of the Satoshi Nakamoto Action Fund, which played a vital role in shaping the Bitcoin Bill of Rights.
“The bill has passed the Pennsylvania House of Representatives and is prepared to pass the Senate, which is a critical issue for both candidates and voters. More importantly, the Bitcoin vote represents a new and growing constituency actively seeking a political home.”
Pennsylvania is currently the only state with a divided legislature, meaning that neither party has complete control, and bills always require bipartisan support to pass. The bill received bipartisan acclaim in the Democratic-led House, and with strong Republican support, it is encouraging for Cabell, who hopes for victory in the Senate.
“A bill aimed at achieving financial freedom rights should receive bipartisan support,” Cabell said. “These 26 ‘no’ votes come from members who have less understanding of blockchain technology and some others who are concerned about the environmental impact of Bitcoin.”
