The New Jersey state legislature is now considering a new bill that would require cryptocurrency businesses to obtain a proper license to operate.

Assemblywoman Yvonne Lopez proposed the Digital Asset and Blockchain Technology Act on Feb. 20. The legislation would establish new requirements for virtual currency businesses and create consumer-friendly protections by requiring crypto firms to disclose their legally registered names, Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) policies, and their licensing and legal history to the State of New Jersey’s Department of Banking and Insurance. 

Bitcoin regulation in the United States hasn’t been fully addressed

Though the largest Bitcoin surge happened over three years ago, there were no state regulations surrounding cryptocurrency in New Jersey. Unlicensed crypto operators had to be tried on a federal level through the Department of Justice. Lopez highlighted the need to address these issues locally:

“People see and hear about [Bitcoin] in their day-to-day lives, but most are not quite sure what it is. We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue to develop and expand in New Jersey.”

The bill also requires crypto companies to disclose their terms and conditions for consumer accounts and their they are protected by the Federal Deposit Insurance Cooperation (FDIC), as are traditional bank account holders. Anyone applying would need to provide a schedule of fees, and any information regarding the risks of investing in digital assets.

“With this legislation, consumers will be better-informed of the risks involved when investing in virtual currency.”

By introducing a state-level licensing scheme, New Jersey would join its neighbor New York in requiring cryptocurrency firms to obtain special permission to operate. In 2014, New York financial regulators introduced the BitLicense, making it one of the toughest jurisdictions in the union for cryptocurrency-related firms to operate.