The Virginia legislature established a definition for virtual currencies in 2022. This year, new legislation would create a commission to better understand and regulate its use in the Commonwealth.
Of the brief, unscientific survey of Virginia elected officials I spoke to for this story, few owned cryptocurrencies and most didn’t really understand it. But that’s why legislation moving through the House from northern Virginia Senator Saddam Salim may help.
“There’s a lot of uses in logistics, healthcare, farmlands; how does the Commonwealth take advantage of that?” Salim told Radio IQ.
His bill to establish a Blockchain and Cryptocurrency Commission made it out of the Senate before moving to the House Rules Committee, and it's got funding in both the House and Senate budgets. If the bill passes, the commission will inform elected officials on crypto and blockchain’s uses — while also helping to advise future legislation and regulation.
And while Salim said he’s got about $200 worth of digital currency collecting dust in a wallet someplace, he’s approaching the issue from a regulatory stance. Among several concerns, he's focused on how the commission can address issues like scams.
“How do we avoid that, how do we make an awareness campaign, how do we regulate this, so these things don’t occur?” he said.
Roanoke-area Senator Chris Head is another legislator with a bit of crypto stashed away. He was also the one who introduced Richmond lawmakers to the digital currency market in 2022. He had his own crypto bill this year that was rolled into Salim’s, so he’s glad to see the effort advance.
“What does the Commonwealth need to be paying attention to and what do we need to put into place?” Head said of what he hopes the commission will explore.
Attorney Daniel Stabile, co-chair of Winston Strawn’s crypto practice, said other states are taking steps to make themselves friendlier to crypto, even if they’re just answering basic questions about existing laws.
“States that really want to do a service to the digital asset sector will at least clarify the rules of the road,” he said.
Stabile said states have been regulating digital asset services as money service businesses under state law, and there’s two ends of the spectrum when it comes to such legislation. In New York, they created a licensing regime that has been slow to welcome new participants, while in Wyoming they created carve outs for some crypto practices that require no such supervision.
There’s still the glaring problem of federal regulation, or the lack thereof. Even as the Securities Exchange Commission takes steps to recognize some sectors of the market, there’s still a lot that’s unregulated and unknown.
“States can be laboratories for what works or doesn’t, but the truth of the matter is we need the federal government to have a coherent regulatory environment,” he said, stressing the need for congressional action.
But in the meantime, the creation of a commission can help encourage progress.
“It’s an acknowledgement that legislators have recognized the potential importance of blockchain technology which helps an industry that’s been suffering from stigma for years,” Stabile said.
And that’s just the sort of thing Salim and Head hope the new commission will accomplish in the coming months.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
