Bitcoin is widely known as a decentralized payment system. It allows the transfer of funds across borders online with no costs and with no external control. It can serve as a new backbone technology for depository institutions, increasing the speed and efficiency of inter-bank transfers and making it easier for banks to convert funds from one currency to another.
On March 9, New Hampshire’s House of Representatives passed a bill that goes one step closer towards effectively exempting persons using virtual currency from registering as money transmitters.
New Hampshire is considered one the world’s most Bitcoin-friendly states.
Passed the House
According to the New Hampshire General Court Bill Status System, House Bill 436 has already been passed and adopted with an amendment by the House of Representatives and it is currently waiting for the Senate to grant the final approval of the bill.
If approved by the Senate, HB 436 will free every user of Bitcoin and other digital currencies within New Hampshire from money transmission regulations, which may allow businesses such as Bitcoin exchanges within the state to operate without strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.
Bitcoin supporters initiative
HB 436 was introduced, drafted and proposed by Keith Ammon, Barbara Biggie and John Hunt, who are early adopters and supporters of Bitcoin. In fact, Keith Ammon introduced many people to Bitcoin as early as May 2011, when Bitcoin wasn’t legal.
Hunt played an important role in getting the bill passed by the House of Representatives, as he brought the bill out of committee, defended it with Ammon and ultimately convinced the House to pass the bill. Ammon is particularly dedicated to passing the bill in the state of New Hampshire due to his involvement with the New Hampshire Liberty Alliance, a nonpartisan coalition formed to increase individual freedom.
One of the main arguments presented by Hunt and Ammon when defending the bill was that if the US government doesn’t consider Bitcoin as legal tender, it shouldn’t fall under the regulatory guidance designed for money transmission services or products. The bill read:
“‘Virtual currency’” means a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account, or a store of value but does not have legal tender status as recognized by the United States government.”
If the bill is passed by the Senate within 60 days, or two months, New Hampshire residents will be able to utilize Bitcoin without being subjected to tight money transmission regulations or policies. While it is still unclear if this would allow businesses to refrain from collecting user identity and data for KYC regulations and AML purposes, it will grant users in New Hampshire financial freedom and privacy.
Prior to the proposal of HB 436, some of the largest Bitcoin businesses, including digital currency exchange Poloniex, suspended their services in New Hampshire due to impractical regulations. In a notice to New Hampshire residents, Poloniex stated:
“Due to changes in New Hampshire’s regulatory statute as it applies to cryptocurrency, Poloniex will temporarily suspend New Hampshire account creation until further notice. For existing New Hampshire customers, you will receive an email with instructions on how to suspend your account.”
The decision of Poloniex to pull out from New Hampshire was the result of the state’s introduction of its own New York BitLicense-like regulatory framework which created an inefficient ecosystem for local Bitcoin businesses.
By passing the bill, the House, Senate and sponsors of the bill hope to see the Bitcoin market of New Hampshire grow at an exponential rate and encourage other states to ease regulations for emerging technologies.