Regulation
new crypto regulations ban CBDCs
The US state of Louisiana has adopted new crypto regulations that prohibit, among other things, the use of central bank digital currencies (CDBC).
The new regulation also introduces rules for crypto miners and node operators.
Louisiana’s new crypto regulations against CBDCs
The new crypto regulation in Louisiana is what is called Blockchain Basics Actdefinitively approved on June 19. It will actually come into force from August.
Technically, this is an amendment to a previous regulation that did not specifically concern the crypto and blockchain sector, while obviously the Blockchain Basics Act concerns precisely this sector.
The text of the new law explicitly mentions both digital assets and cryptocurrencies.
The same text explicitly states in particular that government authorities will be prohibited from requiring the use, payment or testing of central bank digital currency.
For the specific clarification that “central bank digital currency” means specifically a digital currency, digital medium of exchange, or digital unit of monetary account issued by the Board of Governors of the Federal Reserve (Fed) or by a federal agency. , and which is directly made available to the consumer by these entities, or which is processed or validated directly by these entities.
From this definition, the text excludes digital versions of already existing legal tender, or those issued by private entities.
Louisiana: The ban on CBDCs on the new crypto regulations
The paragraph devoted to CBDC is actually quite sparse.
In fact, it only states that the use and testing of central bank digital currency by government authorities is prohibited.
Additionally, it clarifies that in the State of Louisiana, government authorities will not accept or require payments using the central bank’s digital currency, nor will they be able to participate in any testing of the central bank’s digital currency. central bank of the Fed or any branch or branch. federal government agency.
This would seem to be a definitive statement from the masses banning the US CBDC even before its creation, but the fact that it was previously clarified that digital versions of already existing legal tender should be excluded from the definition of the CBDC perhaps leaves some wiggle room. maneuver.
Obviously, this exception refers to the current digital currency, which is just a digital version of the normal fiat currency that has already been in use for a very long time.
In this text, for central bank digital currency, it is in reality a new one, that is to say a natively digital version and not guaranteed in dollars. Instead, current digital versions of the legal tender of the United States are in all respects backed by dollars.
Such a difference may, however, seem subtle and it is therefore not excluded that in the future a solution will be found to allow Louisiana to also adopt the digital dollar.
Mining
Another topic addressed by the Blockchain Basics Act is crypto mining.
In particular, the state of Louisiana does not like mining companies owned by foreign entities. Indeed, this new regulation prohibits foreign entities from acquiring or maintaining any participation in crypto mining operations carried out within the State.
Crypto mining is therefore accepted, provided that it is carried out by American companies.
To achieve this, it requires that from August 1, mining companies currently engaged in the extraction of cryptocurrency in Louisiana, and controlled by foreign companies, will have a period of one year to get rid of foreign partners, who will have to transfer their shares in full to American companies.
To achieve this, the Blockchain Basics Act provides significant penalties of up to $1 million or 25% of the foreign entity’s ownership interest.
The nodes
The Blockchain Basics Act also legislated blockchain node holders.
First, the text defines who the node operators are and what their role is within a blockchain network. It also clarifies that although nodes play a crucial role in maintaining a blockchain, they do not have the power to modify or decide the outcome of user-initiated transactions.
Blockchain nodes are defined as computing devices that communicate with other similar devices or with participants in the blockchain ecosystem to maintain consensus and integrity of that same blockchain, by creating and validating transaction blocks.
In fact, the new law says little except that nodes exercise no discretion over user transactions.
This in fact specifies that if within a blockchain there are nodes capable of modifying or deciding the outcome of user transactions, the network cannot be defined as a true blockchain.
The results
The only concrete and immediate consequence of this law appears to be the obligation for foreign companies to sell all their shares in crypto mining companies operating in Louisiana to American entities.
Furthermore, in the event that the Fed concretely initiates the project of a natively digital dollar, Louisiana would initially cut itself off completely.
We must not forget that Louisiana is certainly not one of the most advanced states in the United States, but also one of the poorest.
In addition, he is also one of the most traditionalists, and attached to his own origins.
Finally, in November the elections will take place, with which not only the new president of the United States of America will be chosen, but also part of the congress will be renewed. It is entirely likely that this law published at this time also contains a strong propagandist component.