The legislation also provides better clarity for cryptocurrency miners
Lawmakers in Louisiana have amended a bill to prohibit the use of central bank digital currencies (CBDCs) and established regulations for node operators and miners. The revised law will go into effect in August 2024.
The revisions, named the Blockchain Basics Act, ban Louisiana from conducting tests and requiring payments using CBDCs. However, the proposal does not restrict other forms of digital currency. According to the act, “A governing authority shall not participate in any test of central bank digital currency by the Board of Governor.”
Louisiana has implemented strict regulations regarding foreign-owned digital asset mining companies. The law forbids foreign entities from obtaining or holding any ownership in digital asset mining activities within the state.
Starting August 1, foreign-owned businesses involved in digital asset mining in Louisiana must completely divest their interests within one year. Noncompliance with the law can result in substantial penalties, including fines of up to $1 million or 25% of the foreign company’s investment in the operation.
The future of a digital US currency is becoming more doubtful. Along with Louisiana, several other states, such as North Carolina and Florida, have passed laws to limit or prohibit the use of CBDCs.
CBDCs encounter comparable obstacles among the candidates running for the next presidential election. Donald Trump has voiced his disapproval of CBDCs, expressing worries about government intervention and the possibility of heightened surveillance.
President Biden seems willing to consider the possibilities of CBDCs. Nevertheless, it has encountered resistance from some US senators who want to prohibit the launch of a digital dollar.
