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.
In a substantial update to its money transmitter FAQ page, the North Carolina Office of the Commissioner of Banks (NCCOB) has exempted digital currency miners; non-financial blockchain services; and multi-signature and non-custodial wallet providers from the state's Money Transmitters Act (MTA).
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:
"These FAQs are quite remarkable as they define specific activities as falling outside the scope of the regulation, which very well may serve as a template for other state interpretations."
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