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Lawmakers introduce overhaul of Alaska's money transmission law to include virtual currency
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Summary
Senator Jesse Kiel introduced SB 86 to modernize Alaska's 2007 money transmission statutes, explicitly covering virtual currency and creating consumer protections, net‑worth and surety requirements, and a tiered fee model to fund supervision. The division's fiscal note estimates $579,000 in year one and $902,500 in year two.
Senator Jesse Kiel introduced Senate Bill 86 on April 15, 2026, proposing a comprehensive update to Alaska's money transmission law to bring the state in line with a modern model developed by the Conference of State Bank Supervisors. Kiel said the 2007 Uniform Money Services Act no longer fits current technology and market practice and that SB 86 explicitly covers virtual currency (cryptocurrencies) while focusing on basic safety, soundness and consumer protections.
Kiel told the committee that, in 2025, Alaska saw about $8 billion in money transmission value across roughly 31.4 million transactions, with approximately 30% of the value in cryptocurrencies — figures he used to justify modernizing state law and creating clearer rules for custody, insolvency, disclosure and timely transmission. He emphasized the bill is not meant to set rates or tell companies how to price services but to ensure licensees have sufficient assets or conservative investments to protect customer funds and to prevent misuse of customer assets in bankruptcy.
Adam Fleisher, an attorney at Cooley LLP representing the Money Services Roundtable, testified in support, saying the CSBS model law harmonizes regulatory expectations across states, standardizes net‑worth and surety bond requirements, and reduces aggregate compliance burdens while strengthening consumer protections. Director Tracy Reno of the Division of Banking and Securities explained operational benefits: use of the national multi‑state licensing system (NMLS), the ability to accept multi‑state exams, updated definitions of regulated activity, and a shift from a flat renewal fee to a tiered fee structure based on transmission volume so regulation can be funded by industry receipts rather than additional consumer fees.
On the scale of activity, Reno said there are currently 187 money transmitters licensed in Alaska and 39 transmit virtual currency. The division's fiscal note, Reno said, estimates about $579,000 in year one to add three examiner positions and cover startup costs, rising to about $902,500 in year two as additional positions are added; the program is funded from division receipts (DTF) and the division is self‑supporting. The division also cited aligning record‑keeping with the Bank Secrecy Act and use of OFAC and other screening in regular examinations.
Committee members asked for practical examples of how the bill would prevent misuse of customer funds; sponsors and staff used the high‑profile FTX collapse to illustrate how minimum net‑worth, custody standards and periodic examinations would reduce the risk of customer assets being diverted. The committee did not take final action on SB 86 on April 15; testimony and the fiscal note were presented and the committee planned to resume questions at a follow‑up meeting.
What happens next: SB 86 was introduced and heard; the committee will continue questions at the next scheduled meeting and consider the fiscal note and potential amendments.
