State of North Dakota Advances Legislation to Study Virtual Currency Business Activities

Devils Lake Journal and North Dakota News Association

Bismarck – North Dakota House of Representatives passed House Concurrent Resolution 3024, which authorizes the state to consider a first of its kind study in North Dakota regarding the feasibility and desirability of regulating special-purpose depository institutions engaging in virtual currency business activities.

The resolution authorizes the North Dakota Legislative Management to consider studying the concept of special-purpose depository institutions (SPDI) for cryptocurrency to encourage competition and financial innovation, controlling the risks and preventing them from affecting the end consumer. 

Brock Pierce, leading technologist, innovator, and Chairman of the Bitcoin Foundation, championed the potential for high-paying, technology jobs within the state and the economic benefit to North Dakota legacy industries like agriculture, oil and natural gas, and coal.  

digital dollar sign surrounded by binary code -- cryptocurrency digital virtual currency bitcoin blockchain

“The Blockchain technology corridor is already building and it is imperative that we join neighboring states in leading this effort. As someone who has amassed billions in capital and created many businesses around the world, I applaud the state of North Dakota for their foresight and leadership in contemplating policies that will allow for this kind of exponential economic growth to occur,” said Pierce.

Resolution co-sponsor Representative Nathan Toman (R–Dist. 34) said, “HCR3024 is a good step to move North Dakota forward into the blockchain and Fintech realm and to become more competitive in the regulation and service of virtual currency and fintech products. HCR3024 will also provide for a study of the regulation and chartering of new special-purpose depository institutions to provide banking, custodial, and transmission services of virtual currency.”

North Dakota House of Representatives passed House Concurrent Resolution 3024, which authorizes the state to consider a first of its kind study in North Dakota regarding the feasibility and desirability of regulating special-purpose depository institutions engaging in virtual currency business activities. The resolution authorizes the North Dakota Legislative Management to consider studying the concept of special-purpose depository institutions (SPDI) for cryptocurrency to encourage competition and financial innovation, controlling the risks and preventing them from affecting the end consumer.

Special-purpose depository institutions are a new type of bank charter, specifically designed for cryptocurrency. The SPDI is not a typical bank charter but does allow an institution to receive deposits and conduct a range of other traditional banking activities, including fiduciary asset management, custody, and related activities. 

The resolution enjoyed significant bipartisan support and was passed unanimously by the House of Representatives. “This resolution will study the desirability and need for a Fintech sandbox, intended to foster a low regulation environment for the incubation and innovation of new products for the improvement and benefit of all financial services and virtual currency business activities in the state of North Dakota,” said Representative Corey Mock (D–Dist. 18), co-sponsor of HCR3024

Resolution co-sponsor Representative Nathan Toman (R–Dist. 34) said, “HCR3024 is a good step to move North Dakota forward into the blockchain and Fintech realm and to become more competitive in the regulation and service of virtual currency and fintech products.

Legacy North Dakota industries like the Lignite Energy Council can see the benefits. “We look at these applications coming down the pipeline and think there is something to them. In the crypto space, we appreciate the prospect of monetizing these resources, and believe there is significant promise here,” said Jason Bohrer, President of Lignite Energy Council, “From the Coal Industry, we see financial industries turning away from investing in us, and there are interesting elements of blockchain regarding the different ways of monetizing the resource as a value store, which is a promising prospect for our industry.”

The resolution will be sent to the North Dakota State Senate for committee hearings, and eventually to the full Senate for final passage. 

K. William Boyer is the Managing Editor of the Devils Lake News Journal. He can be reached at kboyer@gannett.com, or by phone at (701) 662-2127.  

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