The State of Alaska has introduced a bill this week defining digital currency, as well as broadening its definition of money transmission to include it. A wide array of business functions would require money transmission licenses, including buying and selling through a third party, transmitting, controlling, and issuing digital currencies.
Introduced by representatives Zach Fansler and Sam Kito III, Alaska State House Bill No. 180 outlines a large number of amendments to the state’s existing money transmission laws which were enforced on July 1, 2008.
Currently, the Alaskan statutes declare that a person wanting to engage in the business of money transmission in any way, including advertising and soliciting for this service, must hold a money transmission license or become an authorized delegate of a person who holds a money transmission license.
The digital currency is not currently defined or included in the state’s existing money transmission statutes. This new bill adds a definition for digital currency including bitcoin but refers to them as ‘virtual currency’.
The bill also updates the existing definition of money transmission with a section pertaining to digital currencies. The term “money transmission” now includes conducting the following types of activity in the state, or involving a resident of the state:
- Receiving virtual currency for transmission,
- Transmitting virtual currency,
- Securing, storing, holding, or maintaining custody or control of virtual currency on behalf of others,
- Buying and selling virtual currency as or through a third party,
- Performing retail conversion services, including the conversion or exchange of fiat currency or other value into virtual currency,
- Controlling, administering, or issuing virtual currency.
Alaska has tried to include ‘virtual currency’ in the definition of ‘money transmission’ before. In House Bill No. 271, introduced last year, the definition of virtual currencies was proposed. However, this bill died in committee. Another bill from Alaskan lawmakers seeking to include virtual currencies was Senate Bill No. 152, introduced last year by the Senate Rules Committee by Request of the Governor. However, this bill did not even get as far as House Bill No. 271 and suffered the same fate in committee.
Instead of getting a full money transmission license, Alaska currently offers ‘Limited License Agreement Orders‘ for digital currency businesses.
If this latest bill is approved, many digital currency businesses will have to obtain an annual money transmission license from Alaska’s Division of Banking and Securities. Recently, Coinbase pulled out of Hawaii because of the state’s strict money transmission license requirements. A couple of days later, Bitfinex pulled out of Washington State because the state requires the company to have a money transmission license as well.
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