- Virginia introduces SB 339 to study and promote crypto activities.
- Bill proposes tax benefits for small cryptocurrency transactions.
- Virginia aims to become a leading center for blockchain innovation.
Virginia has just joined the race to become a crypto hub by passing a crypto-friendly bill to explore how the state can promote the growth of these technologies within its borders.
Thanks to the proposed benefits for crypto users and miners in the bill, Virginia competes with other US states aiming to take advantage of the growing crypto industry.
How Virginia’s Bill Could Make It a Crypto Hub
On Monday, March 4, The Virginia House of Delegates passed the landmark crypto-friendly Senate Bill No. 339, introduced by Senator Saddam Azlan Salim on January 9. The bill includes several proposals, including tax breaks for small asset holders and incentives for crypto miners.
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The primary aim of SB 339 is to create a dedicated work group tasked with studying cryptocurrencies, blockchain technology, and crypto mining. This initiative seeks to provide recommendations for fostering and expanding these technologies within Virginia. The positive signal from legislators and the concrete measures they implement are designed to attract high-growth crypto and tech companies to the state, making it a crypto and innovation hub.
SB 339 proposes exempting digital asset miners from obtaining money transmitter licenses and prohibiting targeted ordinances that could impede digital asset mining or business activities. If these initiatives take effect, miners will be attracted to Virginia due to the lower compliance costs.
Notably, the bill also proposes certain tax benefits for cryptocurrency users. For instance, it suggests exempting transactions under $200 from state capital gains tax to facilitate and encourage the use of cryptocurrencies for everyday transactions. This encourages crypto projects to cater to Virginia’s residents due to increased adoption.
Virginia’s Crypto Work Group and Other States
The bill outlines the formation of a new work group consisting of 13 members. This includes five from the Senate, five from the House of Delegates, two nonlegislative citizen members from the blockchain industry, and one nonlegislative citizen representing local government.
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The group is expected to conclude its study and present its findings by November 1, 2024. The recommendations must be submitted to the Governor and the Virginia General Assembly by the first day of the 2025 Regular Session.
The bill positions Virginia in competition with other crypto-friendly states. For instance, Wyoming also exempted crypto businesses from money transmission licenses. The state also introduces the Financial Technology Sandbox, aiming to foster innovation.
Florida also attracts crypto businesses, thanks to Miami’s status as a crypto hub and the absence of state income tax. The state also introduced a pilot program allowing businesses to pay state fees in cryptocurrency.
On the Flipside
- In January, Elon Musk’s X received approval for a money transmitter license in Virginia, signaling the state’s favorable position towards alternative payment methods.
- Virginia has a state income tax rate of 2% to 5.75% for all individuals receiving income from sources within the state. This includes non-residents.
Why This Matters
The competition between states on crypto-friendly regulation is a favorable development for crypto businesses in the US.
Read more about crypto-friendly initiatives in other states:
Florida Announces Plan to Accept Bitcoin Payments for State Taxes
Read more about Tether’s new initiative to protect user assets:
