New Jersey Lawmaker Wants to Introduce a Crypto License

A New Jersey lawmaker plans to license crypto exchanges and custodians who want to operate in the Garden State.

On February 21, Assemblywoman Yvonne Lopez (D.-19) proposed the Digital Asset and Blockchain Technology Act, planning to license any organization looking forward to offering digital asset trading, storage, purchase, sales, exchange, borrowing/lending or issuance services. The license and regulating of businesses will fall under the purview of the N.J. Department of Banking and Insurance.

The term “digital asset” comprises digital currencies, securities and other assets, including anything with a transaction history stored on “a distributed, digital ledger or digital data structure in which consensus is achieved through a mathematically verifiable process.”

According to the proposed bill, business involving crypto assets can not be conducted unless a license is obtained either in New Jersey or in another state. Firms conducting business will also have to make specified disclosures to customers.

An official press release states that the main aim of the bill is to protect consumers.

Lopez explained:

“We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue to develop and expand in New Jersey.”

She referred to New York’s state capital expenditure requirements, noting that they caused many small crypto businesses to flee to New Jersey.

In her statement, Lopez emphasized that it was crucial to “establish fair and reasonable requirements” for these businesses.

Still, welcoming nascent industries will “keep our economy innovative and competitive,” she stated.

Individuals who fail to secure the license or do not have a pending license application will be fined $500 per day, starting from the time the regulator “issues a notice of failure” and extending until the individuals file their applications.

New Jersey has yet to introduce any robust crypto legislation into law, but Governor Phil Murphy did sign a bill in 2019, that would establish a task force to research possible use cases for blockchain.