This weekend, the Uniform Law Commission (ULC), a nonprofit dedicated to creating consistency among U.S. state laws, will convene in Washington D.C. to discuss model legislation (“Regulation of Virtual Currencies Act”) for the regulatory oversight of bitcoin entities. The most recent draft of the ULC’s legislative proposal is designed to mirror the findings of the Conference of State Bank Supervisors (CSBS). In fact, the ULC committee taking up this matter was “…encouraged [to] follow to the extent possible guidance available from CSBS.” This raises a number of concerns, given the CSBS’ use of broad language and cumbersome requirements, including minimum net worth, surety bonds and proof of insurance, and separate consumer protection and cyber security policies/procedures on top of existing AML program expectations.
On a positive note, the ULC appears poised to recommend an “onramp” during which certain regulations could be relaxed so as to accommodate innovation. On this point, the ULC is at odds with the CSBS, which appeared to take exception to a probationary period for startups. Separately, and perhaps most notable, the ULC proposed a reciprocal licensing agreement among states regulators. At the expense of stating the obvious, this would drastically reduce the time, resources and headaches associated with redundant licensing applications.
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