Louisiana Governor Jeff Landry recently signed a bill aimed at prohibiting central bank digital currencies (CBDCs) in the state. HB 488 prevents governing authorities from accepting or requiring payments in CBDCs, and also bars participation in CBDC tests conducted by the Federal Reserve Board of Governors and other federal government bodies.
The bill not only protects individuals and businesses’ ability to accept crypto for legal goods and services, but it also ensures the right to self-custody crypto in non-custodial and hardware wallets. Moreover, the legislation establishes rules around crypto mining and node operation to protect against potential abuses.
Under the new law, operating a node to connect to a blockchain protocol, transferring crypto on the protocol, and staking on the protocol are all deemed legal activities. However, participants must still adhere to federal and state securities laws, and the attorney general can take action against fraudulent activities related to mining and staking.
One of the key provisions in the bill is the restriction on prohibited foreign parties controlling digital mining businesses. Existing parties must divest from such businesses by August 2025, or risk facing civil penalties. This measure aims at safeguarding the integrity and security of the state’s crypto mining operations.
Louisiana is not alone in its efforts to regulate crypto mining and CBDCs. Other states, such as Oklahoma, Montana, and Arkansas, have also introduced legislation addressing similar issues. These states are grappling with the complexities of regulating emerging technologies while balancing innovation and consumer protection.
At the federal level, there are also discussions surrounding CBDCs and crypto regulation. The US House passed a bill to prevent the Federal Reserve from creating and issuing a CBDC without Congressional approval. This demonstrates the growing interest and concern at both the state and federal levels regarding the future of digital currencies.
Louisiana’s bill to prohibit CBDCs and protect crypto mining reflects a broader trend towards regulating and managing the risks associated with digital assets. The state is taking proactive steps to ensure a secure and transparent environment for crypto activities while navigating the complexities of a rapidly evolving industry.