As states across the nation gear up for their summer recess, the momentum behind digital asset legislation is only accelerating, potentially shifting voters' focus to numerous congressional and down-ballot races this fall. In 2024 alone, over 30 bills impacting digital assets have been enacted at the state level, more than doubling last year's count. This surge in legislative activity spans both Republican and Democratic states, reflecting a broad, bipartisan appetite for clear and consistent crypto regulation. With November elections on the horizon, states are keen to demonstrate their progress, underscoring the growing importance of digital assets in the political landscape.
A Surge in State-Level Crypto Legislation
The first half of 2024 has seen a remarkable increase in state-level legislation concerning digital assets. This trend is not confined to one political party or region; it is a nationwide movement that highlights the growing recognition of the importance of clear and consistent crypto regulation. States are eager to show their commitment to this emerging sector, especially as the November elections approach.
New England: A Hotbed of Crypto Policy Activity
June has been particularly active for state crypto policy in New England, a region that is home to several important races and a variety of bills addressing key areas such as custody requirements, self-hosted wallets, unclaimed property, crypto mining, and central bank digital currencies (CBDCs).
New Hampshire: Expanding Regulatory Frameworks
In the swing state of New Hampshire, which has alternated between Democratic and Republican majorities in its state legislature since 2006, there are significant moves to expand its regulatory framework to include certain digital-asset activities. The state legislature spent June negotiating differences between the House and Senate versions of HB 1241, which aims to extend its money-transmitter laws to capture "virtual currency" transmission.
Maine: Addressing Self-Hosted Wallets
Maine, another potential swing state in 2024, recently advanced a digital asset update to its own MTL regulations. However, the change included some problematic provisions for self-hosted wallets. When Maine Governor Janet Mills signed LD 2112 into law, the bill included language that could stifle how self-hosted wallets interact with the rest of the digital asset ecosystem. Policymakers will need to address this issue during the bill’s implementation process.
Massachusetts: Modernizing Fiduciary Management
Senator Elizabeth Warren's home state of Massachusetts is also advancing crypto legislation. H. 1641 aims to modernize how fiduciaries manage digital assets, aligning with similar legislation across the country like HB 3778 in Oklahoma and SB 1458 in California. The measure has been recommended for further study by the Joint Judiciary Committee, made up of members from both the State House and Senate. The committee is poised to examine the bill and make recommendations on it before the end of the year. Massachusetts is also making strides at the local level. Just south of Boston, the city of Quincy recently issued the first municipal blockchain-based bond for $10 million with J.P. Morgan. Supporters have been championing the lower costs, enhanced liquidity, and reduced settlement times the measure promises for debt markets. Given how vocal Senator Warren is on the federal level, we are taking stock of what happens in the state.
Rhode Island: Setting Capital Requirements
In June, another New England state, Rhode Island, saw Governor Dan McKee sign SB 2803 into law. The bill incorporates minimum capital requirements and limits on investments for “currency transmitters” operating in the state, including crypto exchanges.
Southern States Making Strides
The momentum is not limited to New England. Southern states are also making significant progress in crypto legislation.
Louisiana: Encouraging Bitcoin Mining
Louisiana's HB 488, signed by Governor Jeff Landry, encourages Bitcoin mining and prohibits CBDCs. This bill received bipartisan support for championing states' rights in crypto policy.
North Carolina: Prohibiting CBDC Payments
A final win for crypto advocates came on June 27, when HB 690 passed the North Carolina state Senate. CBDC payments would be prohibited under the legislation, as would North Carolina’s participation in the Federal Reserve’s CBDC tests. The bill is going to the governor for consideration.
The Implications for November Elections
States are increasingly shaping the regulatory environment for digital assets, providing clarity and security for digital asset businesses and consumers. The steady growth in legislative activity at the state level is a clear signal that policymakers are hearing from their constituents on these issues, which will have important implications for the upcoming November election. More than 50 million Americans own crypto. In swing states with tight races, these crypto swing voters are poised to make a major impact.
These voters recognize that the United States is at a turning point when it comes to leadership on Web3, and they don’t want to see us cede this frontier to our global competitors. Candidates that support clear rules of the road and want to work on advancing this new technology in the United States could win tight races across the country. June’s activity at the state level is proof that policy leaders can come from anywhere in the country and either side of the aisle.
Conclusion
The surge in state-level crypto legislation in 2024 is a testament to the growing recognition of the importance of clear and consistent regulation in the digital asset space. From New England to the Southern states, policymakers are taking significant steps to provide clarity and security for digital asset businesses and consumers. As the November elections approach, the impact of these legislative efforts will be closely watched, particularly in swing states where crypto swing voters could play a decisive role. The United States is at a critical juncture in its leadership on Web3, and the actions taken by state legislators today will shape the future of this emerging sector.
Peter Herzog is the state and local government affairs lead at the Crypto Council for Innovation.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
