North Carolina grants exemption to prominent Bitcoin businesses

North Carolina will grant exemptions from its rules to prominent bitcoin and blockchain companies as industry advocates suggest it will avoid the unclear regulations seen in other U.S. states.

The North Carolina State Money Transmitters FAQ page has been updated to say that the Office of the Banking Commissioner (NCCOB) has approved exemptions from the Money Transmitters Act (MTA) for the cryptocurrency mining industry, non-financial blockchain services, and co-signed and non-regulated wallet providers.

Notably, the exemption is a collaboration between NCCOB, law firm BuckleySandler LLP , and industry advocacy group the Chamber of Digital Commerce (CDC), which worked with government relations consultancy Gide on the initiative .

The NCCOB has previously supported a bill aimed at protecting Bitcoin and digital currency-related industry activities.

As the CDC and its partners say, North Carolina’s decision was made in collaboration with industry stakeholders, and it stands in stark contrast to New York’s unique licensing system, the BitLicense, which was enacted earlier this year.

BuckleySandler legal counsel Amy Kim said in a statement:

"These FAQ pages become quite compelling when it comes to defining certain activities as being outside the scope of the rules, and they will provide a good template for judicial interpretation in other states."

In addition to the exemptions, the NCCOB also detailed that digital currency transfers would be subject to the MTA’s regulation, as would virtual currency “exchanges and administrators” depending on their business models.

“An exchange that sells virtual currency shares would not generally be regulated by the North Carolina MTA as a virtual currency transmitter ,” the FAQ page states. “In contrast, an exchange would be considered a typical virtual currency transmitter if it holds customer funds and enters into satisfactory buy and sell orders with third parties and transmits virtual currency and legal tender between buyers and sellers. ”

The North Carolina government further clarified that digital currency businesses do not need a specific license to operate in the state. It should be noted that this provision also applies to money transfer entities that use legal currency.

Taken together, the changes are one of the most significant updates to NCCOB's FAQ page yet and remove another hurdle for businesses seeking to reach more customers in the nation's ninth most populous state.

According to bitcoin advocacy group Coin Center, North Carolina law previously provided exemptions only to designated agents of businesses that obtained a money transmitter license.