The regulatory model proposed by the United States' Uniform Law Commission (ULC) is flawed, and Nevada legislators have failed to advance a controversial cryptocurrency regulation bill.
Nevada State Assembly has not taken any action on SB195
The Nevada Senate passed a deadline for further action on the SB195 bill on Friday (April 12, 2019). Since no action was taken, the bill has actually been shelved, marking the victory of the state's cryptocurrency stakeholders.
Nevada's Bitcoin advocates made a great contribution @CaitlinLong_ @Tyler_Lindholm@senatordriskill
– TraceMayer (@TraceMayer) April 16, 2019
SB 195 seeks to implement ULC's Uniform Provisions on Virtual Money Business Law (URVCBA) and the Uniform Supplementary Commercial Law on Virtual Money Business Law.
The bill was filed in February 2019 and was strongly opposed by cryptocurrency and blockchain stakeholders inside and outside California.
Opponents of the ULC cryptocurrency regulation model say that these laws have a negative impact on virtual currency ownership. Instead, critics say URVCBA is more concerned with trading activities that control cryptocurrencies.
The ULC model is an attempt to extend the Uniform Commercial Code (UCC) to the encryption and blockchain industries. The plan's goals also include replacing the state's fragmented laws with a more unified regulatory model that allows businesses across the US to conduct business in the industry.
ULC regulatory model is not good for the development of cryptocurrency
Wendy Stolyarov, head of government affairs at blockchain hardware developer Filament, wrote to the bill as early as March 2019. The excerpts from the letter are as follows:
"Although our business does not rely on cryptocurrencies, we are concerned that SB195 may inadvertently classify us as a currency trader because we have built hardware wallet technology to make machine-to-machine autonomous trading possible."
In addition to the burden of currency trading licenses for encryption and blockchain companies, URVCBA introduces cryptocurrency tokens from super-negotiability protection. This protection provides protection for all unknown obstacles to cryptocurrency buyers.
UCC lawyer Andrea Tinianow stressed in an article published in Forbes in March this year that the ULC guidelines only ensure the liquidity of assets held under the name of a registered third party. At the same time, most token holders are the direct owners of cryptocurrencies.
In response to these criticisms, ULC issued a statement at the end of March 2019 requesting states to stop all legislative procedures surrounding the URVCBA regulatory model. ULC also said it will further study how to create a better UCC framework for cryptocurrency and blockchain technology.
As states such as Missouri and Wyoming reject the ULC model and instead support more protective laws, other states may also worry that if they adopt a flawed URVCBA, they will lose their competitive edge.