Blockchain Regulations Proposed By Vermont State Senator

Blockchain, News, Regulation | January 9, 2018 By:

Vermont state senator Alison Clarkson has proposed a bill to create a new blockchain regulatory framework in order to collect tax in cryptocurrency. The bill has been forwarded to the Committee on Economic Development, Housing and General Affairs.

The bill was first introduced on January 3. It proposes to implement strategies relating to blockchain, cryptocurrency, and FinTech in order to promote regulatory efficiency. The bill also proposes to promote education and adoption of financial technology in the public and private sectors.

The bill outlines how the state of Vermont could classify certain crypto firms as “digital currency limited liability companies,” particularly companies that are offering new cryptocurrencies and are conducting initial coin offerings (ICO). If the bill is approved, digital currency limited liability companies will be required to pay “in the form of its cryptocurrency a transaction tax equivalent to $0.01” whenever a new unit of cryptocurrency is created, traded or transferred.

“In its governance, a digital currency limited liability company may adopt any reasonable algorithmic means for accomplishing the consensus process for validating records of the holders of its currency,” the bill states. “It may provide for the modification of the consensus process or the substitution of a new process that complies with the requirements of law and the governance provisions of the digital currency limited liability company.”

The bill also calls for the Agency of Commerce and Community Development and the Department of Financial Regulation to review the e-residency program established in Estonia and consider areas for potential adoption of a comparable program or regulatory changes within Vermont.

In addition, the bill proposes a FinTech Summit to explore legal and regulatory mechanisms to promote the adoption of financial technology in the state. The FinTech Summit is also aimed at exploring opportunities to promote financial technology and economic development in the private sector.

In June, 2017, Vermont Governor Phil Scott signed a bill that mandated an official study into blockchain technology and the many potential applications it could hold in state administration.