A Louisiana House committee has advanced a bill to create a “regulatory sandbox” for companies that use blockchain technology, The Center Square reports.
Blockchain is a type of database for storing digital information such as cryptocurrency transactions. With his HB482, Rep. Mark Wright, R-Covington, hopes to attract and encourage the development of companies that use the technology, which may be more in demand as cryptocurrency continues to gain popularity.
The idea of the sandbox is to encourage development of companies in new sectors for which specific regulations don’t apply. The companies are lightly regulated at first, giving lawmakers time to create additional regulations, or not, as necessary.
Under Wright’s proposal, companies would apply to the Louisiana Office of Financial Institutions for the two-year program to test their business model.
“It’s not like we let them come in and do anything they want,” Wright says, noting the companies would pay taxes and be subject to civil and criminal liability as normal. “This is basically saying we’re open for business. We want to invite this new innovation, but here’s some basics that we’re going to require.”
Utah, Florida and Wyoming are among the states that successfully have instituted sandboxes for various industries, according to the right-leaning Pelican Institute for Public Policy. Tennessee is considering a “general purpose” sandbox, the Pelican Institute says.
Though sandboxes are a relatively new concept, the U.K. has found companies utilizing sandboxes got to market 40% faster than other firms and were 50% more likely to get funding, says Eric Peterson, who directs Pelican’s Center for Technology and Innovation Policy. Read the full story.