Connecticut, US, Passes Bill Banning State Government Virtual Asset Holdings and Payments

Doohyun Hwang

Summary

Connecticut has announced the final passage of a bill prohibiting the state government from holding and making payments with virtual assets.
The bill stipulates that assets held by licensed virtual asset remittance operators are to be regarded as 'property interest' of stakeholders.
It was reported that the law prohibits Connecticut state government and its public agencies from purchasing, investing in, or making payments with virtual assets.

The US state of Connecticut has passed a bill that prohibits the state government's holding and payment of virtual assets (cryptocurrencies).

On the 10th (local time), the Connecticut House of Representatives announced the final passage of the “Act Concerning the Definition of Virtual Currency Control Service Providers and Restrictions on Retention and Use in the Public Sector (HB 7082),” enacting it as Public Act No. 25-66.

The bill first establishes a new definition for a 'virtual currency control services vendor.' In addition, clear requirements are specified for state-licensed virtual asset remittance operators, including: ▲ mandatory notification ▲ issuance of receipts ▲ procedures for the use of virtual assets ▲ requirements for entering into third-party custodial agreements.

It is stipulated that a portion of virtual assets held by remittance operators are to be regarded as 'property interest' of creditors and other stakeholders. Accordingly, in the event of bankruptcy of a licensed remittance operator, the virtual assets held may be treated as assets subject to recovery.

Notably, this bill prohibits Connecticut state government and all its public agencies from ▲ accepting or requesting virtual assets as a means of payment ▲ purchasing, holding, investing in, or designating virtual assets as reserve assets. The legislation effectively blocks all use of virtual assets in the public sector.