Alaska's money transmission regulations broaden the scope of regulated money transmission activity to include virtual currency.
The Division of Banking and Securities (DBS) regulation modifies Title 3, Chapter 13 of the Alaska Administrative Code.
"virtual currency" from January 1, 2023. It will mandate companies dealing with cryptocurrencies to obtain a money transmission license in the state.
As reported by the law firm Cooley on December 19, the state of Alaska amended its money transmission regulations to include a definition of virtual currency. The Division of Banking and Securities (DBS) amended the local Administrative Code to define virtual currency as follows:
“A digital representation of value that serves as a medium of exchange, unit of account, or store of value but is not money, whether denominated in money or not.”
The most visible impact of this change, which takes effect on January 1, is the requirement for a person engaging in money transmission activity involving virtual currency to submit a licensing application.
Other parts of the amendment state that virtual currency will be included in the definitions of "permissible investments" and "monetary value." However, as the Cooley analysis points out, affinity and rewards programs, as well as digital tokens used in online gaming, remain outside of the "virtual currency" category.
Even before the amendment, platforms dealing with cryptocurrency were required to obtain an Alaska money transmission licence. However, the previous version of their Limited Licensing Agreement (LLA) with DBS expressly prohibited the use of virtual currency. As a result, these LLAs will be out of date as of January 1.
Alaska is still one of nine states that offer 0% capital gains tax to investors. Washington, Wyoming, South Dakota, New Hampshire, Nevada, Texas, Tennessee, and Florida are the others. Nonetheless, according to a recent survey, it ranks 36th out of 50 states in terms of cryptocurrency adoption.
What are your thoughts on Alaska's updated money transmission regulations? Share your thoughts in the comment section below.
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