Pennsylvania has taken a significant step toward establishing regulatory clarity for digital assets with the House of Representatives passing a bipartisan bill aimed at providing a framework for the burgeoning cryptocurrency industry. House Bill 2481, also known as the Bitcoin Rights bill, passed overwhelmingly with a 176-26 vote, garnering support from 76 Democrats and all 100 Republican members.
This move comes amidst ongoing uncertainty at the federal level regarding cryptocurrency regulation and which agencies should oversee the $2 trillion market. The bill now proceeds to the Republican-controlled Senate after the election, and if approved, will land on Governor Josh Shapiro’s desk.
The legislation addresses key aspects of digital asset ownership and usage, including protecting residents’ rights to self-custody their assets, ensuring the ability to use bitcoin as payment, and providing specific guidelines for taxing bitcoin transactions. The bill was developed with assistance from the Satoshi Action Fund (SAF), a bitcoin advocacy group that has played a role in similar legislative efforts in 20 other states, with laws already enacted in Oklahoma, Louisiana, Montana, and Arkansas. SAF’s focus is on promoting bitcoin adoption at the state level and encouraging lawmakers to establish clear regulatory guidelines, a step the federal government has yet to take.
The intersection of state and federal jurisdiction over financial products and payment methods can be complex. While some state laws regarding financial products sold to small investors can be contentious, federal law often supersedes state regulations concerning payment methods. Moreover, the federal government has yet to classify many digital assets beyond bitcoin and ethereum as securities subject to SEC disclosure rules. The Commodity Futures Trading Commission (CFTC) oversees cryptocurrencies classified as commodities, applying a less stringent regulatory approach.
Crypto regulation has become a politically charged issue in the current election year, with Republicans and their presidential nominee, former President Donald Trump, advocating for less stringent regulations to appeal to the estimated 50 million Americans who believe the Biden administration’s regulatory approach has hindered innovation.
“In these highly polarized times, it’s encouraging to witness bipartisan cooperation to advance innovation and prioritize security for Pennsylvanians who own and transact with cryptocurrency,” stated Republican Pennsylvania state Representative Mike Cabell, the bill’s sponsor and a long-time bitcoin investor.
Cryptocurrency ownership in Pennsylvania has grown significantly, with approximately 1.5 million residents, or roughly 12% of the state’s 13 million population, owning some form of digital asset.
