Florida Web3 Legislative Update: Are We Ready For 2025?
Florida's Legislative session is over halfway over. How have all 6 of our web3 bills done so far?
This year, the FBBA has been actively engaged in both offense and defense in Tallahassee, striving to advance legislation we believe is beneficial for the state and industry, while also proactively addressing what we perceive as potentially harmful legislation.
I will provide a brief overview of each bill, as well as highlight some new issues that have emerged midway through the session.
Digital Gold and Silver
One of the bills we've been most supportive of this legislative session, HB 697, also known as the Sound Money Act, has been a major focus for us. In collaboration with Citizens for Sound Money, a nonprofit committed to advocating for sound money principles, we have been promoting this bill to the fullest extent possible.
In essence, this bill would allow states to constitutionally distance themselves from the Federal Reserve's money printing by recognizing gold and silver as specie legal tender. Florida would establish its own gold and silver depositories to store physical gold and silver, while also permitting the use of digital gold and silver (IOUs) as money.
Significantly, the gold and silver would not need to originate from the Federal Reserve or the U.S. Treasury. Florida could produce its own gold and silver coins. The significance of this is so profound that I believe it requires no further explanation to my followers.
Due to its significance, this bill has encountered several obstacles, despite substantial support from legislators and other nonprofits. Some of these obstacles may be political, such as disagreements between a bill sponsor and certain committee members or leadership. Others stem from the Department of Revenue's uncertainty on how to establish entirely new institutions.
Nevertheless, this is the bill's first year, and Florida's next session (committee weeks) could begin as early as December 2024. I am confident that this bill will gain significant momentum in the next legislative session.
Fighting the SEC and Attracting DAOs
Our Decentralized Autonomous Organization bill was perhaps the most complex bill we tackled this session. We anticipated difficulties in advancing it due to a general lack of understanding. Indeed, explaining DAOs is even more challenging than explaining Bitcoin.
Still, the bill served its purpose. The Florida Bar has formed a committee to study the bill.
Our objective is to foster an environment that attracts open-source software projects and their founders to Florida for legitimacy and safety. If Biden continues as President, Gary Gensler, Chair of the SEC, is expected to remain in office until 2025, particularly as long as Elizabeth Warren has influence in the White House.
Thus, it is crucial that states devise strategies to counteract federal institutions that threaten technological innovation. My aim is for Florida to lead this effort.
A Mini-Bitlicense
This bill generated considerable concern within our community. Mandating businesses to obtain a license for self-custody of Bitcoin and other digital assets would have been detrimental to the industry.
Fortunately, this bill has been shelved and will not progress further. Moreover, when it is reintroduced in the next session, the wording will likely be revised.
Bringing Rich Bitcoiner’s To Florida
A Bitcoin sales tax holiday would encourage affluent Bitcoin enthusiasts to visit Florida and purchase luxury goods with Bitcoin.
It would also promote broader adoption by enabling regular Bitcoin users to purchase goods without paying sales tax.
The real opportunity lies in setting a precedent that transactions with Bitcoin could exempt buyers from taxes, raising the question of what other taxes could be avoided through Bitcoin transactions.
This bill is expected to pass without issue. The state's main challenge is estimating the potential revenue loss to prepare for next year's budget, a difficult task given the unprecedented nature of a Bitcoin sales tax holiday.
Regulating Virtual Currency Kiosks In Florida
Known as SB 662, Florida seeks to regulate virtual currency kiosks. Contrary to some beliefs, virtual currency itself is not the cause of fraud. However, an increasing number of romance scams targeting the elderly in Florida involve virtual currency kiosks. While existing safeguards are adequate, the state is considering additional measures.
This bill has prompted significant independent lobbying from kiosk companies, particularly regarding the House Bill, which is seen as more burdensome than the Senate version. Although the Senate version is advancing through committees and could pass, the House bill's lack of movement suggests that the issue may be revisited next year.
What Is The CFO of Florida Doing?
We have noted intriguing language in a comprehensive Department of Financial Services bill promoted by Florida's Chief Financial Officer, Jimmy Patronis. The bill includes provisions that would grant the State of Florida authority over dormant Bitcoin wallets. The rationale behind this language is unclear and does not appear to be malicious, albeit it is confusing.
The primary concern is enforceability: how can the government identify unaccessed Bitcoin, claim ownership, and then access it?
Given that many Bitcoin users intentionally leave their wallets dormant, and those who have lost access cannot retrieve their assets, it is doubtful the State of Florida could do so either.
This language is part of a larger legislative package that is passed annually and is likely to be approved. We are in dialogue with the CFO’s office and hope to clarify the motivation behind this language.