Alabama in the Context of 2024 Cryptocurrency Legislation

As of 2024, the state of Alabama requires a license for selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission. This mandate encompasses both virtual and fiat currencies. Under Alabama law, “monetary value” is defined as a medium of exchange, including virtual or fiat currencies, regardless of whether they are redeemable in money. This legislation indicates that any entity engaged in the transmission of virtual currencies in Alabama must adhere to the state’s licensing requirements, positioning Alabama as a state with a regulated approach towards cryptocurrencies.

In the broader context of the United States, the cryptocurrency legislative environment varies significantly across states. For instance, some states have embraced blockchain and cryptocurrency by passing laws that either facilitate the growth of these technologies or integrate them into various sectors. Others, however, have remained more cautious or have not yet introduced specific legislation pertaining to cryptocurrencies. This variation underscores the decentralized and evolving nature of cryptocurrency regulation in the United States.

Notably, the Anti-Money Laundering Act of 2020 at the federal level has brought cryptocurrencies under more stringent scrutiny. This act codifies prior guidance from the Financial Crimes Enforcement Network (FinCEN), subjecting all transactions in “value that substitutes for currency” to reporting requirements and money transmitter registration. This definition includes digital currencies, thereby extending federal oversight to transactions involving cryptocurrencies.

Alabama’s stance on cryptocurrency, requiring licensing for monetary transmission activities that include virtual currencies, aligns with a more cautious and regulated approach. This regulatory framework aims to ensure that entities involved in cryptocurrency transactions adhere to established financial and legal standards, thereby safeguarding both the consumer and the broader financial system from potential risks associated with digital currencies.

This landscape reflects the broader national and state-level efforts to balance the innovation and opportunities presented by cryptocurrencies with the need for consumer protection, financial stability, and compliance with existing financial regulations.

Sources:

Bloomberg Law​​

National Conference of State Legislatures​​