The New Jersey General Assembly Science, Innovation and Technology Committee on Monday approved four measures regarding virtual currencies and blockchain technology, including some that would regulate transactions involving digital assets, like cryptocurrency.
For years, some lawmakers have pushed for regulations on virtual currencies and the blockchain technologies that enable them.
This month, Assemblywoman Yvonne Lopez (D-19) re-introduced the Digital Asset and Blockchain Technology Act which Assembly Democrats said would “provide transparency, consumer protections, and a licensing structure for both operators and consumers engaging in virtual currency transactions.”
It would require people to procure a license to engage in digital asset business activity with or on behalf of a New Jersey resident. People who have been convicted of fraud, embezzlement, forgery, or theft within the past five years would be prohibited from being issued a license.
The measure unanimously cleared a legislative committee on Monday. It also advanced in the Senate after the Senate Commerce Committee approved it.
Lopez said she was inspired to act in 2018 after a few constituents notified her that they had been victims of cryptocurrency fraud. She first introduced her bill last session.
Subsequently, a Commission of Investigation report found that several people had been tricked into sending money to unknown wallets through bitcoin kiosks, that look similar to ATMs. Some people lost tens of thousands of dollars, according to the report.
“So many of us don’t even have a clue what [virtual currency] means,” Lopez said. “And because there’s so many individuals that don’t understand, they become a victim of fraud.”
Lopez said she hopes the bill will be enacted by June, and that it will most likely have to go through the Assembly Appropriations Committee first.
Sen. Nellie Pou (D-35) introduced the measure in the Senate.
Both Pou and Lopez said the measure was introduced as a way to protect consumers as new forms of currency emerge.
“Certainly within my district, I have found that there are a lot of young people, especially the millennials that are very interested in looking at this,” Pou said.
“They really do think that this is the way of the future, that this is a new currency that is really going to make a difference. It’s an opportunity for them to engage in this type of financial arrangement … that it will grow to allow them for future financial stability or increase in their finances” Pou added.
The Assembly Science, Innovation and Technology committee also approved measures that would establish a regulatory framework for digital assets and blockchain innovations; ban public officials from accepting virtual currencies and NFTs as gifts; and promote blockchain integration in the New Jersey business sector.
It comes a week after President Joe Biden signed an executive order that would require the federal government to analyze the risks and benefits associated with cryptocurrencies, a first in the U.S. market.