Senate committee approves amended virtual-currency kiosk rules, sends bill forward 5-0

The Senate Industry and Business Committee voted unanimously to pass amended language for House Bill 1447, a bill that would regulate virtual-currency kiosks in North Dakota and set transaction limits and consumer-protection requirements.

The committee adopted amendments offered by the Department of Financial Institutions and approved the bill as amended by a 5-0 vote. Scott Meske, representing Bitcoin Depot, urged the committee to adopt the version that passed the House and asked for additional time to work with regulators on language. "We would like an opportunity to work with, the agency and folks on the language," Meske said. Department of Financial Institutions Commissioner Lisa Cruz told the committee the department had negotiated with stakeholders and that consumer protections in other states supported the approach: "I do think that the House, we negotiated too much and we're too nice. ... The initial, what we had was $1,000. We negotiated that and we said we're okay with $2,000. Vermont and California, they have $1,000 limit. Minnesota, and I was just told Nebraska just passed theirs, they're at 2,000."

The committee debated language that had previously required special handling for the "first five transactions within the first 30-day period"; committee sponsors moved to strike that clause and accept the Department of Financial Institutions' amended version, which simplifies certain operational requirements. Senator Klein moved the departmental amendments and later moved for a do-pass recommendation as amended; the clerk recorded 5 ayes and no nays on both the amendment and the final motion.

Industry witnesses cautioned against provisions they said could impede legitimate users and asked for time to reach consensus with regulators. Meske said his company could accept the House version but asked for a chance to see if negotiated changes could reduce friction while protecting consumers: "This is a burgeoning industry, growing industry and we have legitimate people that are using these kiosks for legitimate reasons. And we just want to make sure we're not hampering those abilities."

Commissioner Cruz said other states with stricter rules still have large numbers of kiosks operating and that the state should establish guardrails for consumer protection. With the adopted amendments, the committee issued a do-pass recommendation; the bill will be forwarded to the full Senate for further action.