Crypto Asset Activities Fall Under Rhode Island’s Money Transmission Laws
Rhode Island has been putting effort towards clearing defining the regulatory framework of cryptocurrencies. The main question that has since stumped the U.S. state in New England is whether the virtual asset can be classified as money or some monetary value that falls under their transmitter laws.
Since the passing of Bill 5847 in July of 2019, more clarification has been provided. Turns out, some crypto activities will now be subject to the state’s money transmitter laws as per Alston & Bird Consumer Finance Abstract.
As per Rhode Island’s statute, anyone providing “electronic money transfers for a fee or other consideration,” must register as a money transmitter, which is regulated by the Rhode Island Division of Banking.
The bill describes cryptocurrencies as
“a digital representation of value that (A) is used as a medium of exchange, unit of account or store of value; and (b) is not legal tender, whether or not denominated in legal tender.”
Some guidelines appear to have been proposed as well, which seem to be directed towards crypto businesses and individuals offering related services. In particular, said the group is required to disclose certain matters to residents while developing compliance programs. The latter is suggested mostly for personal data safety, privacy and integrity among others, such as anti-fraud and -money laundering, and security programs.
Coin Desk also reported on this matter, stressing that there are licensing exceptions for “personal, family or household” uses of cryptocurrencies, as well as for educational and escrow services. The new law will be in effective commencing January 1, 2020.