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CoverStory

card fees, tags and title The disruptive nature of blockchain generally, and cryptocurrencies in particular, has not
taxes. Jahosky said BitPay been lost on governments. The Securities and Exchange Commission, for example, has tak-
also is in discussions with en the position that cryptocurrency tokens traded on cryptocurrency exchanges should be
several city governments treated as securities. Meanwhile, several states have enacted laws and regulations regard-
interested in accepting ing cryptocurrencies.
cryptocurrency tax pay-
ments. In New York the state government authorized the licensing of cryptocurrency firms. Only
a handful of firms have received licenses to date, including BitPay. Licensees are subject
Technology, legal to the same strictures that apply to other regulated financial firms, including capitaliza-
frameworks tion, know-your-customer, anti-fraud and cybersecurity policies. Several other states have
licensing requirements (Connecticut, New Mexico, North Carolina, Oregon and Pennsylva-
Cryptocurrencies are nia are among them), several specifically exempt cryptocurrency companies and exchanges
based on blockchain, or from regulation (Illinois, Kansas and Missouri), and still others (like Hawaii) ruled these
distributed ledger tech- business violate state money transmitter laws.
nology, which is essential-
ly an open, online spread- Lawmakers in California recently passed two bills that relate to blockchain and
sheet. Blockchain boasts cryptocurrencies; both are awaiting final sign-offs by the governor. The legislation defines
transactional transpar- blockchain and cryptocurrency, and amends several of the state's commercial laws to
ency, as every transaction incorporate blockchain technologies. It also would establish a state working group to
is verified, recorded and examine potential benefits of blockchain to the state and come up with a regulatory game
stored; once recorded it plan.
cannot be altered. Users
send the exact amount of Detractors complain, however, that lawmakers stripped out provisions in the legislation
cryptocurrency needed to that would have created a licensing structure, placing cryptocurrency firms operating there
effect payment. in a perpetual state of regulatory limbo. "At the very least we would expect the creation of
a new 'enrollment program' would take the place of money transmission licensing, thus
Blockchain is a versatile providing clarity," Jerry Brito, executive director of Coin Center, a Washington, D.C.-based
technology that can sup- research and advocacy center focused on blockchain technologies and cryptocurrencies.
port more than financial
transactions, and there Coin Center isn't alone in the nation's capital. In September 2018, a group of cryptocurrency
appears to be broad inter- and blockchain companies formed the Blockchain Association to lobby lawmakers and
est in applying the tech- regulators.
nology to track flows of
information and goods. Patti Murphy is senior editor at The Green Sheet and president of ProScribes Inc. Follow her on
"Ultimately, it's more of Twitter @GS_PayMaven.
a business enabler, than
a technology," the inter-
national consulting firm
Deloitte said in reporting
results of a recent survey
of corporate attitudes to-
ward blockchain. Among
large corporate executives
surveyed, 78 percent said
they believed their orga-
nizations will lose com-
petitive advantage lest
they implement block-
chain.

Steve Larke, partner in
the technology consult-
ing practice at Deloitte,
said blockchain will ush-
er in the most significant
changes in the retailing
and packaged goods mar-
kets.

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