The US state of Louisiana has amended its legislation to ban the use of banking digital currencies

The US state of Louisiana has amended its legislation to ban the use of central bank digital currencies (CBDCs) and set rules for miners and node operators. The amended law will come into force in August 2024.

The amendments, dubbed the Blockchain Fundamentals Act, prohibit the US state of Louisiana from participating in the tests and accepting or requesting payments using the central bank’s digital currency. However, the legislation does not prohibit other digital currencies. The law states that “the governing authority may not participate in any testing of the central bank digital currency by the Governor’s Council.”

Louisiana also imposes strict controls on foreign-owned digital asset mining companies. State law prohibits foreign parties from acquiring or maintaining any interest in digital asset mining operations in Louisiana.

Beginning August 1, 2024, foreign-owned companies currently engaged in digital asset mining in Louisiana will have one year to fully divest their interests. The law provides for significant penalties for non-compliance, reaching up to $1 million or 25% of the foreign party’s share in the mining.

Node Operators in Louisiana

Louisiana’s revised legislation provides a definition of node operators and their role in the network, clarifying that while nodes play an essential role in maintaining the blockchain, they do not have the authority to modify or determine the results of user-initiated transactions.

According to the law, a node is a computing device that communicates with other devices or participants on the blockchain to maintain the compliance and integrity of the blockchain, create and verify blocks of transactions. notice:

“A node does not exercise discretion over transactions initiated by an end user of the blockchain protocol.”

Digital dollar versus US elections

The prospects for a digital dollar in the United States are becoming increasingly uncertain. Like Louisiana, other states, including Florida and North Carolina, have taken legislative action to restrict or prohibit the use of central bank digital currencies.

Central bank digital currencies face similar challenges among presidential candidates in the upcoming election. Donald Trump has expressed opposition to central bank digital currencies, citing concerns about government overreach and the possibility of increased oversight. During a January campaign speech, Trump said he would “never allow the creation of a central bank digital currency,” saying it would give the government “absolute control” over people’s money .

On the other hand, the Biden administration appears more open to exploring the potential of central bank digital currencies. However, it faced legislative opposition from several US senators seeking to ban the introduction of the digital dollar in the country.

According to the Cointelegraph Research database, at least 110 countries are actively exploring or developing a central bank digital currency (CBDC). Of these, 39 have reached more advanced stages, such as piloting or launching digital currency initiatives by the central bank.

review: Fear and doubt among lawmakers are the motivation behind the proposed regulation of cryptocurrencies in the United States.

Leave a Reply

Your email address will not be published. Required fields are marked *