PROVIDENCE – The General Assembly has recently approved legislation that would clarify and streamline regulations for financial transactions using blockchain technology.
The bill had not yet been transmitted to Gov. Gina M. Raimondo for her signature as of July 8, according to General Assembly spokesman Greg Pare.
Under House and Senate bills, the state would consolidate two licenses required for tech companies that assist consumers with financial blockchain transactions.
The legislation would consolidate Rhode Island’s current electronic money transmitter license and its sales of checks license and add the authority for virtual currency to the new currency transmission license.
The new license would allow licensees to conduct all the activities allowed under the two prior licenses, plus virtual currency activities. Currently, users of blockchain financial applications are required to have both licenses.
Blockchain is a database technology that can be used to store information in a secure and public or encrypted manner, creating a decentralized database of blocks of data that are shared by all users. Each block is attached to a chain of blocks that came before it, creating an easily traceable and hard-to-alter history of the data.
Although the design’s highest profile use is to track the virtual currency Bitcoin, Walmart has started using it to track the supply chain of its produce, and Rhode Island-based CVS Health Corp. and Fidelity Investments have been using it to ensure patient information security and to facilitate financial transactions of the future, respectively, according to a statement from the General Assembly.
Lawmakers said the legislation will better position Rhode Island’s businesses to use the emerging technology.
“Our message in Rhode Island for the last several years is that we welcome business development and growth. This bill is one element of the effort to make Rhode Island a place where businesses can thrive,” said House Majority Leader K. Joseph Shekarchi, D-Warwick. “By readying our regulatory systems for the technology of the future, we’re encouraging tech companies that may be developing blockchain technology to consider Rhode Island.”
“This is economic-development legislation. By adopting it, we are making space for new kinds of companies and industries and helping to advance the companies that are already here,” said Sen. Louis P. DiPalma, D-Middletown, who sponsored the bill in the Senate. “The more we can adapt our laws and regulations to emerging technologies [such as] this, the more inviting we are to entrepreneurs and growing companies that will bring high-paying jobs in technology and other sectors.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.