With a new Senate bill on the table, New Jersey is getting closer to introducing a state-level licensing framework for crypto firms.
The New Jersey Senate is set to consider a new bill that proposes the creation of a new, mandatory licensing framework for all cryptocurrency firms operating in the state.
Introduced on Nov. 5, the new Senate bill, or “Digital Asset and Blockchain Technology Act,” has been sponsored by the Democratic Party senator for New Jersey’s 35th Legislative District, Nellie Pou.
S3132 is now pending a referral to the Senate Commerce Committee. The Senate bill follows the introduction of the same legislation (to New Jersey’s General Assembly earlier this year, and the latter’s subsequent referral to the Assembly Appropriations Committee.
The bill proposes that all digital asset businesses must already be licensed, or at least have already filed a license application, in order to legally conduct business activities with, or on behalf of, a resident of the state.
Alternatively, digital asset business activities may be deemed legal in New Jersey if the business participants are already licensees in another state with which New Jersey has a reciprocity agreement.
The New Jersey license for crypto firms will mandate activities that include issuing digital assets, offering digital asset exchange services, borrowing and lending digital assets, and storing, holding, or maintaining custody of digital assets on behalf of others. The latter licensing requirement excludes entities that are already regulated custodians in the United States, such as banks, trusts and broker-dealers.
Any person or entity that conducts activities without a license or pending license application would be liable to a penalty of $500 per day.
As previously reported, New Jersey’s neighbor state of New York is well-known for its controversial and exacting state-level licensing framework for crypto businesses. Known as the BitLicense, New York’s license is this year set to be updated for the first time in almost five years.