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Senate committee approves Money Services Act update to add virtual currency licensing and background checks
Summary
The Senate Insurance & Commerce Committee passed a bill to update Arkansas' Money Services Act to add virtual currency as a licensable money‑transmitter activity, standardize definitions and require more background checks for transmitters; sponsor and regulators said the change aims to improve consumer protections.
Senate members on the Insurance & Commerce Committee on Thursday approved an update to the Money Services Act that adds virtual currency to the activities covered by money‑transmitter licensing and strengthens background‑check and regulatory tools for state oversight.
Senator Desmaine, presenting the changes, told the committee the measure is intended to "bring Arkansas into conformity with other states on definitions, background checks, permissible investments, and exclusions to licensure" and to give regulators tools to track and respond to bad actors in virtual currency transactions. He said the draft follows national model language developed with industry and regulators.
Highlighting the scope the sponsor cited recent state‑level transaction data: "there are approximately 3,700 and, or or 3,703 hundred 72,000 virtual currency transaction initiated in Arkansas with an amount well in excess of $84,000,000," a figure offered to illustrate activity the state lacks tools to monitor under current law. Committee members asked staff to clarify those figures; staff and witnesses agreed to provide clearer numbers in follow‑up materials.
Karen Tierney, an attorney from the Arkansas Securities Department, and Eric Munson, the department commissioner, joined staff at the table to answer technical questions. Munson told members regulators had worked with national groups including the Conference of State Bank Supervisors and the North American Securities Administrators' model efforts to build consistent definitions and rules. "Industry is in support of these changes because they want the same definitions across state lines," a staff member said.
Lawmakers pressed whether the bill primarily serves industry or consumers. The sponsor said the consumer benefit is increased ability to track transmitters and that background checks, bonding requirements and network standards would create a clearer path for enforcement and consumer redress. Several senators asked whether the bill enables businesses such as farms to accept or transact in cryptocurrency; staff said that was outside this bill's scope.
The committee approved the measure by voice vote. The bill now moves on for further action on the Senate floor according to the legislature's schedule.
The committee also asked for follow‑up materials on transaction counts, the number of in‑state transmitters and other data the staff relied on.
The committee adjourned after taking up several other bills on the agenda.
