New Jersey Assembly to Hold Bitcoin Hearings

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NEW YORK (InsideBitcoins) — It doesn’t seem that New Jersey is going to sit around and wait for the New York Department of Financial Services to release their guidance on how bitcoin companies should be regulated. Bitcoin legal expert and business attorney Marco Santori has announced that the New Jersey Assembly will hold a hearing related to bitcoin and other digital currency regulations this Thursday. Santori has also let it be known that he will be providing testimony in the hearings, along with New York Law School professor Houman Shadab, George Mason University law professor and Coin Center founder Jerry Brito, and other members of the bitcoin community.

Who is participating in the hearings?

I was able to reach out to Assembly Democratic spokesman Tom Hester to get more information on Thursday’s hearings. Although Santori was able to share a few names of the participants in the hearings via Twitter, the full list of attendees actually contains nine experts in the fields of bitcoin and digital currencies. Here is the full list of participants, via Hester:

Houman Shadab – Professor of Law, New York Law School
Brian Stoeckert – Managing Director, CoinComply.
Christian Martin – CEO and Co-Founder, TeraExchange.
Leonard Nuara – President and Co-Founder, TeraExchange.
Jerry Brito – Executive Director, Coin Center
Charles Cascarilla – CEO, ItBit
Robert Wilkins – CEO, ZiftrCoin
Quentin Page – General Counsel, Coinware
Marco Santori – Counsel, Pillsbury Winthrop Shaw Pittman

What will be covered in the hearings?

Hester was also able to share some of the details of what exactly will be covered in Thursday’s hearings. When it came to how the hearings came about in the first place, Hester had this to share:

Chairman Coughlin wanted to do a hearing on digital currency because he realized that the role of digital currency is expanding in society and felt that the legislature should consider how to ensure New Jersey is prepared to deal with that ever expanding role.”

Like many other regulatory and legislative hearings on bitcoin from around the world, it appears that these hearings will be more about education than anything else. Hester mentioned that the hearing will “cover a general overview of digital currency [and] bitcoin.” In addition to learning about the basics of bitcoin, participants will also discuss legitimate uses of digital currency in today’s economy and the current regulatory framework at the federal and state levels.

After presenting a description of bitcoin and how it can be used by the general public, attendees can offer recommendations for any action that should be taken by New Jersey towards digital currency. Hester noted, “The focus here will be on consumer protection.”

What is the importance of these hearings?

Although many in the bitcoin community cringe at the thought of any sort of regulation coming to the digital currency, the reality is that regulatory clarity can only help businesses understand the current landscape of the bitcoin industry. Legislators and regulators that are able to create a clear regulatory framework for bitcoin are likely to attract new businesses to their states.

“Regulators typically only have sticks, while legislators can offer carrots.  This could be a very good thing for the industry.”

Finally, I was able to ask Marco Santori — one of the listed participants in the upcoming hearing — for more of his thoughts on what this means for bitcoin. Santori was quick to point out one special aspect of Thursday’s legislative event that makes it quite different from other hearings we’ve seen in the past:

“This is a critical event in the course of the digital currency industry. State Regulators have held official hearings before, like New York’s’ DFS on the BitLicense.  A state legislature, though, has yet to hold official hearings. This will be important because, unlike state regulators, legislators have the power to create tax and other incentives to attract digital currency  businesses to their state. Regulators typically only have sticks, while legislators can offer carrots.  This could be a very good thing for the industry.”

The hearing will begin at 10:00 AM EST on Thursday, February 5th. It will likely be streamed on the New Jersey State Legislature website.

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