On Monday, Louisiana lawmakers approved the landmark bill on crypto, which will take effect in August 2024. The amendment, dubbed Blockchain Basic Act, will restrict central bank digital currency (CBDC) use.
The new rules ban the state of Louisiana from taking part in any CBDC trials or tests requiring digital dollars in payment. Besides the restrictive measure of CBDC, the legislator outlined clear rules for mining crypto and node operators.
Louisiana Greenlights Crypto Bill
According to the announcement, if the bill takes effect, Bitcoin miners will be subjected to stricter regulations for crypto mining. The new provision bans offshore miners from operating in Louisiana.
This implies that the foreign Bitcoin miners’ operation in Louisiana will have until August of next year to cease their operation in the region. The Act highlights that foreign Bitcoin miners must redirect their investment elsewhere starting in August.
Noncompliant Bitcoin miners will be exposed to hefty fines and legal charges. The announcement states that the foreign Bitcoin miners who fail to divest their business from Louisiana as of August 2025 will settle a $1 million penalty.
Citing the long-term environmental damages caused by Bitcoin mining, Louisiana seeks to mitigate the risk related to this activity. Apart from the prohibitive measures on the operation of foreign Bitcoin miners, the new provision extended to node operators in the region.
Louisiana Bans Development of CBDC
The bill clearly defines the role and responsibility of a node operator. The law recognizes the node operator as an individual or business maintaining the blockchain ledger and verifying network transactions.
A node in advanced devices maintains seamless communication on the blockchain network. The node maintains blockchain consensus and integrity by developing and validating the transaction block accordingly.
Also the new provision bans the node operator from interfering with the transaction or determining the transaction’s outcome on the blockchain network. The rule restricts the node to use its discretion on transactions initiated by the user.
Reportedly the bill was supported by State Representative Mark Wright and State Senator Jean-Paul Coussan. The bill aimed to protect Bitcoin rights in Louisiana, which is critical in the mainstream adoption of crypto assets.
The new rules shield investors from exploitative activities that limit their ability to attain financial freedom. Louisiana has joined other pro-crypto states seeking to boost financial inclusivity through Bitcoin.
US Seeks to Protect Bitcoin Rights
On X, the Satoshi Action Fund chief executive, Dennis Porter, was pleased to announce the approval of the Blockchain Basic Act seeking to protect Bitcoin rights. The X user stated that the State of Louisiana has renewed the anti-CBDC spirit in the US.
Currently, the State of Florida, North Carolina, has enacted new rules restricting the use of CBDC. In the ongoing presidential campaign, CBDC has become the topic of discussion.
Former US president Donald Trump vowed not to allow the development of CBDC if he ascended office. Trump explained that the development of CBDC confers government control over individual finances.
The presidential aspirant stated that CBDC development will allow the government to spy on citizen spending behaviors. The Trump anti-CBDC movement contradicts the Biden administration’s digital dollar development.
The Biden Administration invested heavily in the research and development of CBDC to promote financial inclusion in the United States. In February, five legislators teamed up to oppose the development of CBDC.
The legislators drafted the CBDC Anti Surveillance State Act outlining the risk of the development of the digital dollar. The bill emphasized the need to protect the citizen’s financial privacy.
As the US legislators show mixed reactions to the development of the CBDC, over 110 countries have invested in the development of digital currency. The report shows that China leads other countries in the development of CBDC. Of the 110 countries, 39 states have proceeded with the CBDC trials.
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