The Alabama Blockchain Study Commission, created by a legislative resolution in May, met for the first time at the State House.
Representatives of large and small businesses, banks, credit unions, energy companies, and legal organizations took part, as well as state agencies and legislators.
The commission picked Sen. Greg Albritton, R-Atmore, as chair. Albritton sponsored the resolution creating the commission and is also chair of the Senate’s General Fund budget committee.
Amanda Senn, director of the Alabama Securities Commission, was picked as the vice chair.
Albritton urged the committee members to take a broad view as they began to explore Alabama’s role in the growing segment of business. He organized three subcommittees for the 18 members of the commission. They will study how to regulate blockchain technology and cryptocurrency, how to protect the public, and what are the best applications of blockchain technology for the public and private sectors.
Alabama Securities Commission Director Senn said companies that have popped up around the cryptocurrency industry are operating like banks and investment firms but are not subject to the same regulations and laws as those institutions. Senn said the ASC has been investigating and prosecuting cases of fraud involving cryptocurrency for about 10 years.
“Right now, it’s the wild, wild west in the crypto industry,” Senn said.
Senn said there are concerns about the lack of safeguards for money laundering and said cryptocurrency is used to fund terrorism in foreign nations. She said there are concerns about financial exploitation of senior citizens and that consumers and investors are not protected in the same way that they are when they conduct business with banks and other traditional financial institutions.
Senn distinguished between cryptocurrency and blockchain technology, saying they are not synonymous, and said the state should explore the possibilities of how to use blockchain technology.
Mike Hill, superintendent of banks for the Alabama State Banking Department, echoed concerns about the lack of regulations for cryptocurrency companies.
Hill said banks are heavily regulated on knowing who their customers are, in part to prevent money laundering. He said the state needs to figure out how to apply safeguards to cryptocurrency companies.
Wade Preston of the Alabama Blockchain Alliance said blockchain technology and cryptocurrency offer great potential for the public and private sectors and that the state’s efforts to regulate them should recognize and protect that. Preston, who is a coffee shop owner, said incidences of fraud are not exclusive to the new technology and should not be a reason to overreact and impose regulations that inhibit blockchain and cryptocurrency. He noted that people were reluctant to use the Internet for credit card purchases 25 years ago, but that now that is standard practice.
“In Alabama, our motto is we dare defend our rights,” Preston said. “And I think our right to transact, our freedom to transact, is a fundamental right. It’s a right that everything else is predicated on.”
Preston said cryptocurrency and blockchain technology provide ways for people to conduct business without depending on banks and credit card companies.
“I think that’s something we have to always keep in mind when we talk about what are we going to do with this technology, is that at the end of the day, it affords us a real freedom to transact without another intermediary,” Preston said. “And that’s something that we need to not only understand but kind of rally around and figure out how we’re going to deal with that and how we’re going to protect it.”
Clay Helms, chief of staff for Alabama Secretary of State Wes Allen, said one area for the commission to explore is how to regulate donations to political campaigns made with cryptocurrency. Helms said it is important to be able to track the sources of money that influence the outcome of elections.
Rep. Mike Shaw, R-Vestavia Hills, said regulations of financial transactions involving dollars are well established. He said the regulation of cryptocurrency will require thought and planning to come up with the best system to protect consumers while also not inhibiting the industry.
Shaw, who works for a credit union, said educating the public about cryptocurrency and blockchain technology is an important goal.
Helena Duncan, president and CEO of the Business Council of Alabama, who spent a career in the banking industry, said it is important to strike the right balance in regulations to minimize risk while not overregulating the industry.
“Regulation is not a bad word,” Duncan said. “It’s something that helps minimize the risk.”
The resolution creating the Alabama Blockchain Study Commission says “the nationwide growth of blockchain and cryptocurrency technology presents opportunities to increase Alabama’s standing as a national leader in the technology and financial services industries.” It says the goal of the commission is to “study blockchain technology and cryptocurrency and foster appropriate expansion of related industries in Alabama.”
The resolution says the commission is to issue a report no later than the third day of the legislative session, which starts in February, and then a final report in the 2026 session.
The commission will meet again in November.
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