Louisiana Governor Jeff Landry signed a significant bill, HB 488, on June 19, which sets forth comprehensive regulations to prohibit central bank digital currencies (CBDCs) and protect cryptocurrency mining activities within the state. This legislative action is a crucial step in defining the state’s stance on digital currencies and mining practices.
Key Provisions of HB 488
Prohibition of CBDCs
The bill explicitly prevents governing authorities from accepting or mandating payments in CBDCs. It also restricts participation in any CBDC pilot programs or tests conducted by the Federal Reserve Board of Governors or other federal entities. This prohibition reflects a clear stance against the integration of federally controlled digital currencies into the state’s financial systems.
Crypto Acceptance and Self-Custody Rights
HB 488 guarantees that individuals and businesses have the right to:
Accept cryptocurrencies for legal goods and services.
Self-custody cryptocurrencies in non-custodial and hardware wallets.
This provision ensures that residents can freely use and manage cryptocurrencies without external interference.
Crypto Mining and Node Operation
The bill outlines specific rules for crypto mining and node operations:
Home Crypto Mining: Protected as long as it adheres to local noise ordinances.
Commercial Crypto Mining: Permitted in industrial-zoned areas, provided it complies with all relevant ordinances.
Operating a node to connect to a blockchain protocol, transferring crypto on the protocol, and staking on the protocol are all declared legal under the new law. These measures promote the growth of blockchain activities while ensuring they are conducted responsibly.
Regulatory and Security Measures
Louisiana’s attorney general is empowered to act against fraud and other violations related to mining and staking services. Additionally, participants in these activities must comply with federal and state securities laws. This enforcement capability is designed to safeguard the integrity of the state’s crypto ecosystem.
Restrictions on Foreign Control
The bill prohibits foreign entities from controlling digital mining businesses and mandates existing foreign-controlled businesses to divest by August 2025. Non-compliance could result in civil penalties up to $1 million or 25% of the foreign party’s interest in the business, ensuring that control of mining activities remains within acceptable regulatory boundaries.
Implementation Timeline
The bill amends existing state law and will come into effect on August 1.
Broader Legislative Context
Louisiana is not alone in its legislative efforts concerning cryptocurrency:
Oklahoma: Passed a bill in May to protect crypto miners and the self-custody of crypto.
Montana: Enacted a law banning local governments from prohibiting crypto mining.
Arkansas: Imposed and permitted restrictions on crypto mining through recent legislation.
Moreover, several states are considering laws addressing CBDCs. As of February, 11 states had pending legislation to either block state acceptance of CBDCs, reject CBDCs as legal tender, or prohibit participation in federal CBDC trials.
Federal Developments
On the federal level, the US House of Representatives passed a bill to prevent the Federal Reserve from creating and issuing a CBDC without Congressional approval. The bill is currently awaiting consideration by the Senate.
Louisiana’s HB 488 represents a robust regulatory framework aimed at fostering a favorable environment for cryptocurrency usage and mining while safeguarding against federal overreach through CBDCs. As states continue to navigate the evolving landscape of digital currencies, Louisiana’s proactive measures may serve as a model for balancing innovation with regulatory oversight.
Source: cryptoslate.com
