The idea of Bitcoin investing in the United States may seem unlikely and implausible due to the icy reception that virtual currencies have been given by the Treasury and by banking regulators at the federal level, but this does not mean that state regulators have to follow suit.
In early May 2017, the State of Vermont approved a legislative amendment that could pave the way for future regulations to allow Bitcoin investing as well as trading in other digital currencies. The bill in question, H-0182, is the first of its kind in the Green Mountain State to define what actually consists a virtual currency.
Vermont Recognizes BitCoin
In essence, the new law in Vermont recognizes Bitcoin as a currency by virtue of its stored value and its characteristics as a digital monetary instrument. More specifically, Vermont sees virtual currencies as concepts that can act as substitutes for money; to this effect, Bitcoin can now be treated in a manner similar to gold and other precious metals in that state. This is surprising given the fact that a lack of central authority prevents bitcoin protocol from progressing.
What is interesting about this legislative move is that it names virtual currencies as permissible investments, which some people may consider as a path towards approval of Bitcoin investing. Bitcoin has proven to be a volatile investment, with its unpredictability burning many investors. It is important to note, however, that the status of trading Bitcoin in Vermont is limited to being a digital currency that can be bought and sold by licensed money transmitters. This means that investors can only profit from spreads in the Bitcoin currency exchange at this time, and the money transmitters will likely have the upper hand for the time being.
American Northeast recently passed legislation
Another jurisdiction in the American Northeast recently passed legislation that allows residents to conduct transactions with a virtual currency if they so desire. The bill in question is HB436, which was originally filed in early 2017 in New Hampshire, and specifically eliminates some business restrictions related to the money transmission industry.
In the past, the only permissible handling of Bitcoin in the Granite State was limited to licensed money transmitters. The bill met some resistance by state banking regulators; however, it passed the state house with a comfortably margin and was ultimately approved by senators with a 10-13 vote. The legislative committee dedicated to commerce matters chose not to listen to calls by law enforcement agencies and banking regulators to suppress the proposal. In the end, the New Hampshire legislators felt that digital currencies will likely be the the future of e-commerce and retail transactions.
While the legislative stances by Vermont and New Hampshire are admirable, it is important to note that many other states have approached Bitcoin with a lot of hesitation. It certainly does not help that the controversial cryptocurrency continues to generate sensational headlines related to its use by hackers who demand ransomware payments and by criminal organizations engaged in money laundering; still, the same could be said about major currencies such as the U.S. dollar and the euro.