Louisiana, a state in the U.S., has recently made changes to its laws to prohibit the use of central bank digital currencies (CBDCs) and establish regulations for miners and node operators. These new laws are set to take effect in August 2024.
The updated legislation, known as the Blockchain Basics Act, specifically forbids Louisiana from participating in trials or accepting payments with CBDCs. However, the use of other digital currencies is not restricted by this law. The act states that any governing authority cannot engage in testing central bank digital currencies as directed by the Board of Governors.
Furthermore, Louisiana is cracking down on foreign-owned digital asset mining companies. The state’s laws now prevent foreign entities from owning or controlling any part of digital asset mining operations within Louisiana.
Starting on August 1, 2024, foreign-owned businesses currently involved in digital asset mining in Louisiana will have one year to completely divest their interests. Failure to comply with these regulations can result in significant fines, potentially reaching up to $1 million or 25% of the foreign party’s ownership in the mining operation.
The revised legislation in Louisiana also defines the role of node operators in a network. It clarifies that while nodes are essential for maintaining a blockchain’s integrity, they do not have the authority to change or influence the outcome of user-initiated transactions.
In the realm of national politics, the future of a digital dollar in the U.S. is uncertain. Several states, such as Florida and North Carolina, have taken steps to restrict or ban the use of CBDCs, following Louisiana’s lead. The issue of CBDCs has also become a point of contention among presidential candidates. Former President Donald Trump has voiced opposition to CBDCs, citing concerns about government control and surveillance. In contrast, the Biden administration seems more open to exploring the possibilities of CBDCs, despite facing opposition from some senators who are seeking to block the introduction of a digital dollar in the country.
According to research, a growing number of countries worldwide are actively exploring or developing their own CBDCs, with some already piloting or launching initiatives. The push for stricter regulations in the U.S. reflects lawmakers’ apprehension and uncertainty surrounding the use of cryptocurrencies.