(The Center Square) – If Florida lawmakers tweak the state’s money transmission regulations and adopt several relatively minor financial technology (fintech) measures, the Sunshine State could become the next Wyoming in capitalizing on the $100 billion global Bitcoin market.
“Florida can and should become a leader in the advancement of cryptocurrency,” writes Andrea O’Sullivan, director of the Center for Technology & Innovation at Tallahassee-based policy watchdog Madison Institute in a recently published 15-page “Bitcoin Beach” study.
The state “is in an especially fortuitous position to be a leader in cryptocurrency policy” with a highly-skilled labor force, “welcoming tax and regulatory systems” and because it is “home to Miami, the unofficial capital of the Latin world,” she writes.
O’Sullivan said the state is in a position to advance innovative cryptocurrency policy with the 2019 creation of the 13-member Florida Blockchain Task Force to study potential benefits of blockchain, the unanimous 2020 adoption of House Bill 1391, which outlines a “cutting-edge” fintech “regulatory sandbox,” and because developing a cryptocurrency policy is a priority for state leaders, including Florida Chief Financial Officer Jimmy Patronis.
Blockchain is, essentially, linked recordings of transactions; a digital ledger already in widespread use in cryptocurrency – such as Bitcoin – as well as in finance, voting validation, authenticating academic credentials and more.
Blockchain technologies and crypto-currencies first emerged as viable financial systems with the advent of Bitcoin, invented by an anonymous individual or group under the name Satoshi Nakamoto and released as open-source software in 2009.
In a decade, Bitcoin has grown from “a little-known computer science project of dedicated hobbyists to a professionalized financial industry boasting a currency market capitalization of well over $100 billion,” O’Sullivan writes.
Yet, she continues, “Unlike states such as Wyoming and New York, Florida has yet to reform its regulations given advances in cryptocurrency” and offers several “concrete steps legislators can take now to position Florida as a leader in cryptocurrency policy and industry.”
O’Sullivan said Florida’s Office of Financial Regulation, Financial Services Commission and state lawmakers should review how state money transmission regulations affect cryptocurrency applications.
As currently interpreted, even private individuals may have to register as money transmitters in order to legally make a transaction,” she writes. “Private individuals should not be burdened with consumer protection laws as there is no consumer to protect.”
Next, while HB’s 1391’s fintech regulatory sandbox is a “promising step,” O’Sullivan said Florida lawmakers should consider adopting the “handy template” provided by the Uniform Law Commission’s (ULC) model legislation.
The ULC’s Regulation of Virtual Currency Businesses Act “goes further (than HB 1391) by clarifying the legal definitions of concepts in money transmission laws that have led to confusion in court and administrative interpretation,” she writes.
In a Wednesday Orlando Sentinel column, Sen. Jeff Brandes, R-St. Petersburg, who sits on the Senate Innovation, Industry & Technology Committee, cited the Madison Institute study in stating “Florida has a great deal to gain by embracing this innovation.”
Brandes said Wyoming lawmakers have set a replicable example.
“Recent regulatory changes to its money transmission and banking regulations made Wyoming the leading state for cryptocurrency,” he writes. “By taking this issue on, Wyoming’s Legislature has kicked off a virtual gold rush in their state.
“Where are we?” he continues. “Florida has initiated the conversation in this area. Now is the time for the state to take things one step further. We need to build upon the framework established by Wyoming to increase the use of blockchain and cryptocurrency in Florida.”