New Hampshire is known as the ‘Live Free or Die’ state. Living up to its nickname, the state house passed House Bill 436 early Wednesday morning. The bill exempts virtual currencies like bitcoin from costly money transmitter regulations and could pave the way for Bitcoin businesses to flock to New Hampshire.
New Hampshire Exempts Bitcoin from Money Transmitter Regulation
“Listening to twenty politicians debate an esoteric issue is fantastically entertaining,” Jeremy Kauffman, who served as New Hampshire’s governor-appointed advisor for the virtual currency bill, tells Bitcoin.com. “At one point in committee, there was a fifteen-minute debate as to whether or not a previous bill [pertaining to virtual currency] would have regulated Beanie Baby trading, and whether or not such trading should be regulated even if it did.”
A significant portion of discussion time in committee, and on the floor, centered around the Silk Road and ransomware, according to Mr. Kauffman.
“There is tremendous conflation among politicians between the bad things that happen with bitcoin and the technology itself,” he said. “New Hampshire has the highest per-capita bitcoin usage and the longest-running bitcoin meetup. Due to the Free State Project, a lot of early bitcoiners were residents here.”
According to Google Trends, the state ranks sixth in terms of ‘Bitcoin’ search volume for the U.S., behind states like California, Nevada, Washington, New York and Utah.
Representative Keith Ammon, the bill’s sponsor, and long-time Bitcoin enthusiast spoke in favor of the bill on the floor. Representative Barbara Biggie co-sponsored the bill. Representative John Hunt, who helped get the bill out of committee, also defended the bill on the floor by suggesting that regulating the currency would be akin to regulating Beanie Babies.
Avoiding an Exodus of Bitcoin Businesses
Bitcoin regulation in other states has led to an exodus of digital currency companies. Just recently Hawaii virtual currency regulations led Coinbase to leave the island state.
“We understand the Hawaii [Department of Financial Services] has further determined that licensees who hold virtual currency on behalf of customers must maintain redundant fiat currency reserves in an amount equal to the aggregate face value of all digital currency funds held on behalf of customers,” Coinbase stated.
A French man is suing the New York Division of Financial Services over the ‘Bitlicense,’ claiming there has yet to be enough research on the topic of digital currency for regulations to be implemented.
“There are significant and irreconcilable factual differences between the arguments presented by Plaintiff-Petitioner and by Defendants-Respondents which can only be resolved through limited discovery,” the ‘Bitlicense’ lawsuit’s most recent filing reads. “Those fundamental factual differences and disputes involve whether bitcoin is a ‘financial product’ or service which impacts whether Defendants-Respondents had the authority to regulate bitcoin, and whether Defendants-Respondents acted in an arbitrary and capricious fashion when they designed the Regulation.”
Helping Bueuracrats Understand Cryptocurrency
Mr. Kauffman has some advice for those looking to engage politicians in virtual currency discussions.
“My top advice for advocating for the passage of similar bills is to talk about how many smart people are betting a lot of money on this being ‘Web 3.0’ or similar,” Kauffman imparts. “Talk about how the states that encourage this kind of innovation will get the jobs. Reference New York as an example of doing it wrong, and all the businesses that fled and closed.”
Kauffman wonders: Is New Hampshire the best place to run a cryptocurrency business?
“It already has the highest per-capita bitcoin usage,” he writes on the LBRY blog. “And very soon it is likely to have the most favorable regulatory climate.”