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State legislature’s cryptocurrency bill aims to regulate new financial sector
Mike Flood, a state senator from Norfolk, wrote the original bill. He says LB 649 guarantees consumer protection.
“We really made sure that consumers were taken care of,” he said, “that there was information necessary for people who wanted to open accounts and that if they (banks) held dollars U.S. dollars, these U.S. dollars had to be in an FDIC approved account.
A cryptocurrency trading company will open a location in Nebraska. Telcoin recently announced that the state’s first crypto bank will be located in Norfolk, Nebraska.
Senator Flood and Telcoin CEO Paul Neuner were roommates at the University of Notre Dame and Neuner announced that his company would move its headquarters to Norfolk. Telcoin is based in Tokyo, but Nuener says he would consider moving his residence to Nebraska.
The president and CEO of the Nebraska Bankers AssociationRichard Baier, said his group wanted to make sure he was involved in drafting the bill.
“First, we need to ensure that Nebraska banks are able to participate in the digital asset economy,” he said. “Secondly, we are very keen to ensure that appropriate protections are in place, not only for the consumer but also for the banking sector and the financial services sector as a whole, and finally, we wanted to make sure that we had an appropriate regulatory framework.
There are two main reasons why the government wants to regulate cryptocurrencies: tax opportunities and illegal activities. The latter is despite the fact that less than half a percent of crypto transactions are used illegally, according to a report from Edward Jones Investing.
Cryptocurrencies do not have centralized transaction monitoring. Instead, they use what is called blockchain technology, which is a ledger of digital transactions created by a computer network. The network is managed by many different people and their computers.
How banks that buy and sell cryptocurrencies use blockchain will depend on their business model.
There is still confusion about how cryptocurrencies should be classified and the new bill does not clearly address this.
“We don’t pay our taxes with cryptocurrencies. They function as financial instruments. We deal with cryptocurrencies and once we decide to pay our taxes, we have to convert them to a real currency, like the dollar, and then pay our taxes,” he said. “It’s a currency, it’s a particular type of currency that functions like a financial instrument, like a stock.”
This is Dr. Jacques Bou Abdo, professor at the University of Nebraska at Kearney, expert in blockchain technology and cybersecurity.
Abdo answers the question: “How much is the next investor willing to pay?” » applies to cryptocurrency and is generally associated with stocks, although crypto is transferred, traded and viewed in the same way as money.
Supporters believe young professionals will flock to Nebraska, hoping to invest in opportunities.
The only certainty about the future of cryptocurrencies is that it is largely uncertain. Perhaps the most positive aspect of virtual currency is how people can transfer money internationally securely. Stable coins can be useful for transactions, but currencies like Bitcoin are so volatile that they make transactions very risky.
Cryptocurrencies and their regulations can go in many different directions, but the fact that the Nebraska Legislature has already had its hand in the pot shows how important it could be for the future of finance in the state.