Are Maryland and Virginia’s Cryptocurrency Laws a Bellwether for Federal Rules and Regulations?

By Bureau of Labor Statistics – Monthly Labor Review December 2006, Public Domain, Link

The United States federal government employs nearly 2.8 million people, according to the Office of Personal Management (OPM). The only other employer with two million employees is Walmart, and they trail the government by approximately 500,000 employees. That means the federal government is the largest employer in the United States.

Furthermore, the number of federal employees from the two states surrounding Washington, D.C., Maryland with 144,542 employees, and Virginia with 177,133 employees, account for nearly 11.5% of the total federal workers throughout the United States. For context, Virginia ranks third and Maryland fourth in number of federal employees, standing behind Alaska and D.C. But with 11.5% of the government workers situated in Maryland and Virginia, it’s reasonable to consider that legislatures in both states mirror laws that are promulgated by the U.S. federal government. Lastly, being influenced by the U.S. federal government has both positive and negative outcomes; however, laws tend to fall behind the trends. The moving and changing realities within the technology sphere, and especially with emerging technologies, is a fast moving train.

Foundation of Blockchain Technology and Cryptocurrencies Explained

Before we look specifically at the Maryland and Virginia laws, we must first explain the foundation of cryptocurrencies, and their relationship to blockchain technology.

First, the goal of using blockchain technology is to allow digital information to be recorded and distributed, but not changed by outside parties or those who created and produced the original content. Essentially, it’s a shared database populated with entries that must be confirmed and encrypted. For example, cryptocurrencies are a combination of digital money and digital tools of exchange that use cryptography and blockchain technology to facilitate secure and anonymous peer-to-peer transactions. Bitcoin is the most recognizable digital currency, having a market value of over $92.6 billion.

One lingering question about the role of government and digital assets is this: Will the U.S. government and its surrounding states see the potential of cryptocurrency within the global economy?

While I do not want to suggest specific regulations at this time, I do think that it is important to closely follow what the federal and state governments come up with in terms of digital currency laws. At some point, both the federal and state economies may be directly impacted, and it’s time that Maryland and Virginia realize this. Otherwise they will not serve as a bellwether for federal employees future policy direction, but rather they will just remain a homestead for U.S. government commuters.

A Closer Look Into Maryland and Virginia Blockchain Technology and Cryptocurrency Laws

In 2018, the Maryland Financial Consumer Protection Commission delivered an interim report, essentially saying that the state needs further regulations surrounding the emerging technology industry. It’s understandable since Maryland has not designed any friendly digital asset laws. For example, Maryland, “…does not currently require the licensing or registration of companies dealing with virtual currencies, though it does require the licensing of virtual currency companies whose activities are covered by the Maryland Money Transmission Act of 2010.” The law’s language is underwhelming considering that the MMTA was written before cryptocurrencies became a wildly known reality.

Moving forward with examining regulatory laws in Virginia, their state Bureau of Financial Institutions actually does not regulate cryptocurrency. The only regulation touching on virtual currency transactions is found under Chapter 19 of Title 6.2 of the Code of Virginia — and this isn’t particularly dealing with virtual currencies itself. The legislation only covers emerging technologies such as cryptocurrencies when they are transferred with fiat currencies.

Peer-to-peer transactions with fiat currencies is not the norm when paying or trading with virtual currencies.

Lastly, it must be noted, and going back to reflecting on the number of public servants in the Washington, D.C. area, that the federal employees who are deemed to write and implement cryptocurrency regulations, live in states that have not formally executed any cryptocurrency regulations.