North Carolina has carved out regulatory exemptions for select bitcoin and blockchain businesses in a move industry supporters say avoids problematic provisions in place in other US states.
Notably, the exemptions are the result of collaboration between the NCCOB and industry advocacy group the Chamber of Digital Commerce, which worked with law firm BuckleySandler LLP and government relations consulting firm Gide on the initiative.
The NCCOB had previously supported a legislative bill that would have covered bitcoin and digital currency related business activities.
As noted by the CDC and its partners, the decision by North Carolina to instead collaborate directly with industry stakeholders contrasts with efforts like New York’s state-specific licensing regime, the BitLicense, which was enacted earlier this year.
BuckleySandler counsel Amy Kim said in a statement:
In addition to the exemptions, the agency specified that digital currency transmission is regulated under the MTA, as are virtual currency "exchangers and administrators" depending on their business model.
"An exchanger that sells its own stock of virtual currency is generally not considered a virtual currency transmitter under the NC MTA. In contrast, an exchanger that holds customer funds while arranging a satisfactory buy/sell order with a third party, and transmits virtual currency and fiat currency between buyer and seller, will typically be considered a virtual currency transmitter," the FAQ page reads.
North Carolina further clarified that it does not require a special license for digital currency businesses operating in state, noting that it "applies the same standard” to these entities as money transmitters operating with fiat currencies.
Overall, the changes mark one of the most sizeable updates to the agency’s FAQ page, and provide new clarity to industry businesses seeking to reach customers in the ninth most populous US state.
According to bitcoin advocacy group Coin Center, North Carolina law had previously only exempted authorized agents of businesses that had obtained a money transmitter license.
North Carolina capitol image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.