Crypto-Friendly States Could Model Themselves After Pennsylvania, Blockchain Expert Says
*By Chloe Aiello*
Pennsylvania's new, relaxed approach to cryptocurrency regulation is narrow in scope, but could serve as a model for other state regulators adopting a "lighter touch approach," said Drew Hinkes, co-founder and general counsel at Athena Blockchain.
Pennsylvania’s Department of Banking and Securities [on Wednesday issued guidance](https://www.dobs.pa.gov/Documents/Securities%20Resources/MTA%20Guidance%20for%20Virtual%20Currency%20Businesses.pdf) that said cryptocurrency trading platforms and service providers do not require money transmission licenses to operate in the state. The guidance clarifies that it's because"only fiat currency, or currency issued by the United States government, is 'money' in Pennsylvania. Virtual currency, including Bitcoin, is not considered 'money.'"
In layman's terms, it means that cryptocurrency businesses that do business in Pennsylvania will not be subject within the state to the same intensive regulation as money handlers because the state doesn't define cryptocurrency as money.
Hinkes called the approach "friendly" to crypto-business compared to states that have considered regulating cryptocurrency just like money, or, alternatively, drawing up new, stringent regulations for crypto.
"This is the diametric opposite of what we've seen in New York and most other states. It will be interesting to see how this is received by others, and whether other regulators, trying to understand and wrap their arms around this industry, decide to adopt the Pennsylvania approach," Hinkes said.
Since the cryptocurrency industry, much like marijuana, is regulated on a state-by-state basis, Pennsylvania's decision is of limited importance on a national level. But he said he wouldn't be surprised to see some crypto-friendly states modeling their own policies after Pennsylvania's approach.
"This is sort of of limited import ー it only defines folks that are doing business with people that reside in Pennsylvania as to what they are and are not required to do within Pennsylvania," Hinkes said. "I could certainly see this being something used by legislators in other states who are considering taking a lighter touch approach."
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