State Laws May Become the Benchmark for Crypto

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This year, various states have worked to make legal space for cryptocurrency and block initiatives that threaten the industry’s growth. In February, Colorado's governor announced the state would begin accepting cryptocurrency as a form of payment for taxes and licenses of varying kinds beginning in the Fall of 2022. Wyoming is close behind on the same matter. Meanwhile, lawmakers in Florida made amendments to and passed HB 273 which worked to undo the results of a 2019 court case ruling. The result would allow more people the ability to buy and sell cryptocurrency with fewer restrictions. 

One by one, states are passing legislation to decide the fate of cryptocurrency on their own terms. Some policymakers are even partnering with professionals in the industry to accomplish these localized wins. As we witness the race to define the cryptocurrency within local jurisdiction, it begs the question of what the future holds for when federal legislation takes shape. For now, the overall classification of cryptocurrencies cannot be overridden but it still hasn't prevented states from attempting to set other terms.  

Despite being in violation of the Supremacy Clause of the Constitution, Arizona famously works to accept cryptocurrency as legal tender. Texas also considers this move. Of course, this idea will never come to fruition, but the statement it makes is symbolically loud and indicative that states will not wait for the feds to set the stage.  

Despite the recent Executive Order on crypto, it will be some time before sweeping legislation tackles the crypto space. Much of the federal government is behind in understanding cryptocurrencies and blockchain technology.  The states that have noticed the opportunity to carve out an ecosystem for crypto will stand to gain and lose the most. 

Though regulation from the federal government is unlikely to be as draconian as some fear, the tide of federal legislation could always swing against the favor of crypto supporters. For now, the states will have their freedom but it should be noted that the more prevalent and widespread state laws on crypto become, the more likely the federal government will leave a fairly blank legislative canvas for them to paint over.