State Rep. Steve Demetriou of Ohio has introduced the Ohio Blockchain Basics Act, aiming to safeguard the right to use Bitcoin and other digital assets as peer-to-peer mediums of exchange.
The proposed legislation ensures Americans’ financial freedom by protecting their rights to buy and sell, mine, and self-custody their bitcoin, as well as to operate personal blockchain nodes. It also advocates for more lenient taxes on digital assets when used as an actual medium of exchange, suggesting they receive the same tax treatment as legal tender.
Steve Demetriou: Bitcoin Legislation Introduction
In an X post on Thursday, Demetriou stated that the legislation he introduced would lay the foundation for Ohio to become a leader in the blockchain and digital asset industries.
Ohio State Rep. Steve Demetriou speaks to the Ohio Blockchain Council about HB406 (the Blockchain Basics Act) — Source
“This legislation that I recently introduced will lay the foundation for Ohio to become a leader in the blockchain and digital asset industries,” Demetriou said.
The bill includes provisions to prevent the imposition of fees, taxes, assessments, or other charges on digital assets used as payment for goods and services. It further mandates an evaluation of certain digital asset investments by Ohio’s retirement systems, including Bitcoin spot ETFs, as options for various pension funds.
The bill states:
“The general assembly shall not enact a bill that proposes to impose a fee, tax, assessment, or other charge on digital assets used as a method of payment for goods and services that is based on the use of the digital assets as a method of payment.”
The legislation makes Ohio the 16th state to introduce such laws this year, as states move to defend Bitcoin against potential federal regulations.
Regulations for Digital Asset Operators
Democratic lawmakers like Senator Elizabeth Warren have proposed measures to impose Bank Secrecy Act reporting requirements on digital asset wallet providers, miners, and validators, aiming to combat the use of digital assets for criminal activity.
Senator Warren stated that “crypto is enabling rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions in stolen funds, evade sanctions, fund illegal weapons programs, and profit from devastating cyberattacks,” while adding:
“Our expanding coalition shows that Congress is ready to take action – our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox.”
Biden Administration and Digital Assets
The Biden administration had considered imposing burdensome reporting requirements on the mining industry and had proposed a 25% tax on unrealized capital gains for high-net-worth individuals, including digital asset investors. However, this measure has been tabled for now.
Under Biden’s budget proposal, the regular capital gains tax rate for individuals earning over $1 million annually would also be increased to 44.6%.
Notably, in September 2023, Virginia’s State Senate approved a legislative amendment request authorizing regular banks in Virginia to provide Bitcoin custody services.
Further, Wyoming lawmakers passed two new digital-asset-friendly laws during the 67th legislative budget session in March this year. One of the laws provides a legal framework for Decentralized Autonomous Organizations (DAOs).