The state of Louisiana has updated its laws to ban the use of central bank digital currencies (CBDCs) and establish rules for digital asset miners and node operators. The new legislation will take effect in August 2024.
The amendments, known as the Blockchain Basics Act, prohibit Louisiana from participating in tests, accepting, or requiring payments using a CBDC. However, the law does not ban other digital currencies. The Act states, “A governing authority shall not participate in any test of central bank digital currency by the Board of Governors.”
The state is also implementing strict regulations on foreign-owned digital asset mining companies. The new law prohibits foreign entities from acquiring or maintaining stakes in digital asset mining operations within Louisiana.
Starting from August 1, 2024, foreign-controlled businesses currently involved in digital asset mining in Louisiana will have one year to completely divest their interests. Noncompliance can result in penalties of up to $1 million or 25% of the foreign party’s stake in the mining operation.
Node Operators in Louisiana
The revised law also defines the role of node operators in a network, emphasizing that while nodes are crucial for maintaining a blockchain, they do not have the authority to alter or decide transaction outcomes initiated by users. The Act specifies, “A node does not exercise discretion over transactions initiated by the end user of the blockchain protocol.”
Digital Dollar vs. U.S. Elections
The future of a digital dollar in the United States remains uncertain. Louisiana joins other states, including Florida and North Carolina, in taking legislative steps to restrict or ban the use of CBDCs.
CBDCs face similar opposition among presidential candidates. Donald Trump has voiced his opposition, citing concerns about government overreach and increased surveillance. In a January campaign speech, Trump stated that he would “never allow the creation of a central bank digital currency,” arguing it would give the government “absolute control” over citizens’ money.
The Biden administration appears more open to exploring CBDCs, but it has faced legislative resistance from several U.S. senators who seek to ban the introduction of a digital dollar.
Globally, at least 110 countries are exploring or developing a CBDC, with 39 of them in more advanced stages, such as piloting or launching initiatives.
Summary Review: Louisiana’s new legislation reflects a cautious approach to CBDCs and digital asset mining, prioritizing financial stability and state control over foreign influence. As the global landscape for digital currencies continues to evolve, states like Louisiana are setting precedents that could influence future regulatory frameworks. The ongoing debate over the digital dollar in the U.S., coupled with varying state-level regulations, underscores the complexity and contentious nature of integrating digital currencies into existing financial systems.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
