The U.S. State of Pennsylvania has passed a bipartisan bill aimed at providing greater regulatory clarity for digital assets and for the 1.5 million residents of the state who currently invest in them.
Last week, the Pennsylvania House of Representatives passed House Bill 2481, known as the “Bitcoin Rights Bill,” which protects residents’ rights to self-custody digital assets, enables using Bitcoin as a legal form of payment, and outlines taxation rules for Bitcoin transactions.
The bill passed with overwhelming and bipartisan support, in a 176-26 vote that could also set a crucial precedent for digital asset legislation at a federal level. Pennsylvania is an important swing state in the election, and roughly 12% of the 13 million people in the state hold digital assets.
The bill now moves to the Republican-controlled Pennsylvania Senate, where it is expected to be taken up for a vote after the November elections. If passed, it will proceed to Governor Josh Shapiro for his approval.
Developed with the assistance of the Bitcoin advocacy group Satoshi Action Fund (SAF), the bill reflects a growing momentum at the state level for digital asset regulation and clarity, as well as a possible frustration with stalling efforts on Capitol Hill.
Lawmakers in Washington D.C. continue to wrangle over key pieces of digital asset regulation, in particular, the Financial Innovation and Technology (FIT) for the 21st Century Act and the Clarity for Payment Stablecoins Act of 2023; the former passed a full U.S. House of Representatives vote in May but has yet to gain approval in the Senate, while the latter passed Committee stage last July but has since been languishing in the House.
The Stablecoin bill would create a regulatory framework for issuing and overseeing payment stablecoins, including a licensing regime for issuers, reserve requirements, and anti-money laundering checks. The more far-reaching FIT21 Act aims to bring more regulatory clarity to the digital asset space by more clearly defining the jurisdictions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—the two key regulators of the industry—while also clarifying when an asset is a security or commodity, and at what point the former becomes the latter.
There is still hope on the hill that digital asset legislation can be passed this year, but with the election fast approaching and the subsequent lame-duck Congress, time is running out.
In the absence of federal digital asset regulation, states have increasingly taken matters into their own hand, with similar legislation to Pennsylvania’s Bitcoin Rights Bill in the works in 20 other states and laws already enacted in Oklahoma, Louisiana, Montana, and Arkansas.
However, the timing of this week’s vote could have added significance, as Pennsylvania remains a critical battleground in the 2024 presidential election, and both Democrats and Republicans seek to win over digital asset-owning voters.
Former President Trump has been openly courting the digital asset sector for some time, even pitching the U.S. as a “crypto capital of the planet.” Vice President Harris has been markedly coyer on the subject, but with the election date looming ever closer and the race remaining neck-and-neck, she has also begun dropping a few tantalizing hints that her administration would back the industry.
Watch: Breaking down solutions to blockchain regulation hurdles
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