As states across the United States continue to grapple with the regulation of digital currencies, lawmakers in Ohio’s House of Representatives have tabled a significant proposal. The proposed legislation, dubbed the “Ohio Blockchain Foundation Act,” is designed to formulate a robust regulatory structure for digital assets. A fundamental aspect of the bill is the prohibition of additional taxation on cryptocurrency transactions, alongside addressing concerns around mining, staking, and state retirement system investments in digital currencies.
Unveiling the ‘Ohio Blockchain Basis Act’
The Ohio legislature recently saw the introduction of a ground-breaking piece of legislation, the “Ohio Blockchain Basis Act”, otherwise known as House Bill 116 (HB116). The primary goal of the bill is to reform the existing laws in a way that precludes state and local governments from imposing supplementary taxes on cryptocurrency utilized for transactions. The architects of the bill include Representative Steve Demetriou and co-sponsors Tex Fischer, Brian Lorenz, Ty D. Mathews, Riordan McClain, and Josh Williams. Their objective with Bill 116 is to deter any legislative moves to impose charges on digital assets used for payment in exchange for goods and services.
However, the bill, if enacted, would not preclude the regular taxes, fees, or other expenses applicable to transactions with legal tender from applying to cryptocurrency transactions. The bill further proposes that state agencies or political subdivisions should not restrict Ohio inhabitants from accepting digital assets as payment or storing their digital assets through hardware or self-hosted wallets.
Importantly, the bill provides for individuals who engage in mining or staking of digital assets or trading one digital asset for another to do so without the requirement for a money transmitter license. Businesses that provide mining or staking services will also not be deemed as offering a security or investment contract. State retirement funds will be obligated under the bill to assess the potential risks and rewards of investing in cryptocurrency-based exchange-traded funds (ETFs) and present a report on their findings to the General Assembly within one calendar year.
Crypto Legislation Efforts Gain Momentum in Ohio
This latest proposed legislation is part of a concerted drive by Ohio lawmakers to codify legal structures around digital currencies. This drive echoes previous legislative efforts, such as the Senate Bill 317 proposed by former Ohio state senator Niraj Antani. The bill, if enacted, would have mandated the state to accept digital assets for tax and fee payments, and allowed state institutions and pension funds to invest in digital currencies. However, the bill failed to progress beyond a quarter of its legislative journey and thus died out in Committee.
More recently, Ohio State Representative Derek Merrin introduced a bill seeking to develop a Bitcoin reserve within the state treasury. The proposed “Ohio Bitcoin Reserve Act,” or House Bill 703, sought to establish a dedicated Bitcoin fund within the state treasury and provide a regulatory framework for the Treasurer to purchase and hold Bitcoin. On the other hand, Ohio Senator Sandra O’Brien proposed Senate Bill 57 to allow state investment in Bitcoin and establish the “Ohio Bitcoin Reserve Fund.” If enacted, the law would require the state to hold Bitcoin investments for five years minimum.
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FAQs
What is the Ohio Blockchain Basis Act?
The “Ohio Blockchain Basis Act,” or House Bill 116, is proposed legislation seeking to prevent Ohio’s state and local governments from imposing additional taxes on cryptocurrency transactions. It also addresses issues of mining, staking, and digital investments by state retirement systems.
What does the bill propose about crypto mining and staking?
The bill proposes that individuals engaging in crypto mining, staking, or exchanging one digital asset for another do not need a money transmitter license. Moreover, businesses offering these services will not be considered offering a security or investment contract.
How does the Ohio Blockchain Basis Act impact state retirement funds?
The proposed act requires state retirement funds to evaluate the potential risks and benefits of investing in cryptocurrency-based exchange-traded funds (ETFs). They must prepare a report for the General Assembly within a year, detailing these evaluations.
In conclusion, the world of cryptocurrency continues to grow and evolve, and it is vital that legal structures keep pace. Ohio is taking significant strides in addressing this need, and by adopting a forward-looking approach to digital currencies, it continues to position itself as a leader in crypto regulation.
