The bill establishes when a person could apply for a license to operate with cryptocurrencies and when the person could not work with these crypto assets.
A congresswoman in New Jersey introduced the so-called Digital Asset and Blockchain Technology Act last Friday 21st. Yvonne Lopez proposed to license any entity looking to provide digital asset trading, storage, purchase, sales, exchange, borrowing/lending or issuance services.
Now, the New Jersey Department of Banking and Insurance would be responsible for reviewing this license and regulating businesses.
The bill proposes that individuals cannot conduct any business activity around digital assets unless they either have a reciprocal license in another state. Companies conducting business will also be required to make certain disclosures to customers.
According to the official information, the main objective of this bill is to protect the users. “We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue developing and expanding the cryptocurrency world in New Jersey”, Lopez explained in a statement.
In this sense, the congresswoman said that it was important to “establish fair and reasonable requirements” for these businesses. However, welcoming emerging industries will “keep our economy innovative and competitive”, López said.
Part of the proposal implies that people who cannot obtain the license or do not have a pending license application in progress will receive a fine of $ 500 per day, beginning when the regulator “issues a failure notice” and extending until the person submit his requests.
But to avoid misunderstandings in the interpretation of future laws in the United States of America, it was established that the term “digital asset” is related to virtual currencies, digital securities, and other types of assets, including any other type of currency that has a transaction history registered in “a distributed, digital ledger or digital data structure in which consensus is achieved through a mathematically verifiable process”, according to what the bill explains.
New Jersey does not have any comprehensive cryptocurrency legislation into law until now, but Governor Phil Murphy signed a bill last August 2019, approving the creation of a Blockchain Initiative Task Force to study potential new use cases for blockchain technology in the country.
This bill specifically points out medical records, land records, banking, and property auctions as potential applications of blockchain technology in the country.
The interest in blockchain technology has increased in the state over the past two years, particularly due to cybersecurity threats. Now, authorities propose new ways to regulate digital assets to avoid money laundering or other types of crimes. The intention is to protect the users too.
The Digital Asset and Blockchain Technology Act is published on the Internet that features when a person should not be involved in the commercial activity of digital assets. It also states the requirements necessary to apply for a license to operate with digital assets.
Now, New Jersey authorities should give their opinions about this proposal and decide if they will apply it, modify something or not.
By María Rodríguez