Understanding Louisiana’s New Crypto Regulation
If you’re immersed in the world of cryptocurrency, then you’ll want to pay attention to Louisiana. The state has recently enacted a new crypto regulation that has raised eyebrows in the industry. Here’s what you need to know:
The New Crypto Regulation of Louisiana Against CBDCs
- The new crypto regulation in Louisiana is known as the Blockchain Basics Act and was officially approved on June 19.
- This regulation, which will be effective from August, specifically targets the crypto and blockchain sector.
- It mentions digital assets and cryptocurrencies explicitly, outlining rules and limitations.
- Government authorities are prohibited from requiring the use or payment of central bank digital currency.
Louisiana: The Ban of CBDC on the New Crypto Regulation
- The use and testing of the central bank’s digital currency by government authorities is forbidden under this regulation.
- Government entities in Louisiana cannot accept or require payments in the central bank digital currency.
- While the law seems to outright ban the US CBDC, there may be exceptions for existing digital currencies.
Mining Regulations in Louisiana
- The Blockchain Basics Act also addresses crypto mining in the state.
- Foreign entities are prohibited from owning or operating mining companies in Louisiana.
- Starting August 1, foreign-owned mining companies will have a year to transfer ownership to US entities.
- Penalties for non-compliance can be hefty, reaching up to $1 million or 25% of the foreign entity’s stake.
Regulating Blockchain Nodes
- The new law also covers the role of blockchain node operators.
- Node operators are defined as devices that maintain the consensus and integrity of a blockchain network.
- While nodes are crucial for the network, they do not have the authority to alter user transactions.
- If nodes can influence transactions, the network cannot be considered a legitimate blockchain.
The Consequences of the Regulation
- One immediate effect of this regulation is the requirement for foreign companies to divest their shares in mining operations to US companies.
- Louisiana’s stance against a potential digital dollar project by the Fed could isolate the state from future developments.
- The law’s timing, just before the upcoming elections, suggests a possible political motive behind its release.
Hot Take: What This Means for You
If you’re involved in cryptocurrency, whether as a miner or investor, Louisiana’s new regulation could impact your operations. Stay informed about the latest developments in crypto regulation to navigate this evolving landscape effectively.
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