Pennsylvania passes bipartisan bill to bring regulatory clarity to digital assets
Coinbase Chief Legal Officer Paul Grewal discusses the ‘evolution of the crypto voter,’ on ‘The Claman Countdown.’
Specialties: Pennsylvania has become the latest state to pass a bill that establishes some regulatory clarifications surrounding digital assets, continuing a trend in which legislators and governors across the country are trying to give some rules of the road to the US crypto industry, FOX Business has learned.
The move comes amid continued confusion at the federal level about crypto regulation, and which federal agencies should take the lead in enforcing the basic rules for investing in the emerging, $2 trillion digital asset market.
On Wednesday, the Pennsylvania House of Representatives passed a bill that protects the rights of citizens to store their digital assets, guarantees their ability to use bitcoin as payment and provides clear guidelines on the payment of bitcoin. House Bill 2481, called the Bitcoin Rights bill, passed with strong bipartisan support, winning by a majority of 176 votes to 26. The vote included 76 Democrats and unanimous support from all 100 Republican members.
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The bill will move to the Republican-led Pennsylvania Senate after the election and, if passed, onto Gov. Josh Shapiro.
Pennsylvania Gov. Josh Shapiro during an interview at the State Capitol building in Harrisburg, Pennsylvania, on Feb. 28, 2024. (Photographer: Rachel Wisniewski/Bloomberg via Getty Images / Getty Images)
The bill, drafted by the outside bitcoin advocacy group Satoshi Action Fund (SAF), is the latest effort to help lawmakers understand the differences between blockchain technology and bitcoin. SAF was successful in helping write and pass similar legislation in 20 other states, and four bills became law in Oklahoma, Louisiana, Montana and Arkansas. The group’s priority is to help standardize bitcoin at the federal level and encourage state lawmakers to do what the federal government has yet to do — establish clear rules of the road for crypto and normalize it as a form of transaction.
Some country laws involving financial products sold to retail investors can be controversial; State powers surrounding payment methods often violate state law. Meanwhile, the federal government has yet to define which digital assets, other than bitcoin and ethereum, are securities like stocks or bonds, and fall under disclosure rules set by the Securities and Exchange Commission.
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The logo of the US Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, DC, May 12, 2021. (Reuters/Andrew Kelly/File Photo/Reuters)
A separate federal agency, the Commodity Futures Trading Commission, oversees crypto, which is considered a so-called commodity subject to easy regulation. Crypto regulation has turned into a powerful political issue in an election year where Republicans and the party’s presidential nominee, former President Donald Trump, are fighting for a handful of regulations to curry favor with the roughly 50 million Americans who believe the heavy regulatory hand of the Biden administration has stifled innovation.
“In these divisive times, it’s good to see both sides of the field come together to promote innovation and prioritize the safety of Pennsylvanians who own and use cryptocurrency,” Republican Pennsylvania Rep. Mike Cabell, the bill’s sponsor and long-time bitcoiner. investor, told FOX Business.
Crypto ownership in Pennsylvania is also accelerating as 1.5 million residents own some form of digital asset, or about 12% of the 13 million people who live there.
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The state’s role as one of the most influential battlegrounds in the upcoming presidential election has made it a target for political spending by the US crypto industry seeking to sway votes in favor of candidates. With just two weeks left until election day, those 1.5 million crypto holders could make a big difference in tight races like the Senate battle between the incumbent Democratic Senator and his challenger, Republican Dave McCormick, an entrepreneur and bitcoin advocate.
The White House race between Trump and Vice President Kamala Harris in Pennsylvania is also heating up as both candidates are now neck and neck in the polls.
Carnegie Mellon University professor and former SEC chief economist Chester Spatt breaks down a “wish” list of 2024 presidential candidates. (Fox News/Getty Images / Fox News)
“Pennsylvania is a very important battleground in the presidential race, and the outcome could hinge on a few voters,” said Dennis Porter, founder of the Satoshi Action Fund, which played a major role in crafting the Bitcoin Rights bill. “With this bill having passed the Pennsylvania House and poised to pass the Senate, it stands as an important issue for elected officials and voters. In addition, the bitcoin vote represents a new, growing bloc of voters actively seeking a political home.”
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Pennsylvania is currently the only state with a divided legislature, meaning no party has absolute power, and bills always need bipartisan support to pass. The passage of the bill twice in the Democratic-led lower house, combined with strong support from Republicans, is encouraging to Cabell, who is hoping for another victory in the Senate.
“A bill aimed at achieving financial freedom should be bipartisan,” Cabell said. “26 ‘nos’ from members who have little understanding of blockchain technology and others who have concerns about bitcoin’s effects on the environment.”
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