Pennsylvania Bitcoin & Cryptocurrency Update
If you’re like me, you can see the practical applications of Bitcoin and cryptocurrency in multiple different sectors: commercial transactions, consumer transactions, record keeping, data management, currency, commodities, and even securities. The potential is tremendous. I anticipate one day multiple different companies and corporations will opt to create their own cryptocurrencies as methods for fundraising and control (like stocks or securities). I can also see cryptocurrency – particularly if a coin is backed by the federal government – become a dominant currency of use in the United States. These things will take many, many years and the technology is really just getting started.
Companies can use cryptocurrency for data management – creating libraries and assigning certain data sets to pieces of a ledger on a blockchain. Cryptocurrencies have the potential to revolutionize contracts and processing, while eliminating big middlemen who shave off fees from simple purchases and thus drive up the costs of most goods and services. Cryptocurrencies also will revolutionize the foreign exchange (FOREX) market, in that foreign exchanges would, hypothetically, no longer be necessary or obsolete if there was one unified international currency for trade. The elimination of a significant FOREX market would dramatically improve international trade, keep costs low, and eliminate middlemen.
All that said, there is still a great deal of legal confusion regarding cryptocurrency technology. The law is a notoriously slow profession in the United States, and it is undoubtedly the branch of government most resistant to change. Still, there is progress in accepting cryptocurrencies and Bitcoin as legitimate sources of value. The SEC seems to not know what is going on but is nonetheless prosecuting cryptocurrency exchanges under the assumption that these exchanges are trading securities without SEC approval. The actions of Commodity Futures Trading Commission also appear to underscore the general confusion with how cryptocurrencies should be regulated – are they securities? Are they commodities? No one in the federal government seems to know and it will be unlikely to be resolved for several years without some kind of legislative intervention.
What is the current state of the law regarding Bitcoin in Pennsylvania?
In October of 2024, Pennsylvania’s house legislation passed a cryptocurrency law with bi-partisan support. The proposed law prohibits the Commonwealth of Pennsylvania from restricting individuals and businesses from accepting digital assets as payment for legal goods and services and protects the right to self-custody for digital assets without the need for service-provided wallets or independent control of digital assets. Additionally, the new proposed law states that digital assets won’t receive discriminatory tax treatment – they will be taxed similarly to standard transactions without additional taxes or charges based solely on the fact a digital asset was utilized.
Beyond that, nothing much has changed. It is not currently illegal to trade in Bitcoin in Pennsylvania, if you comply with tax and local government requirements.
Are there any new developments for Bitcoin and Cryptocurrency for 2025 and beyond I should be aware of?
Yes. Numerous state and local governments are beginning to accept Bitcoin as payment for taxes and other fees. Detroit, for example, recently allowed bitcoin to pay local taxes. Florida allows businesses to pay business fees with cryptocurrency. The developments are tremendous and happening at an incredibly fast pace.
A big concern, considering the recent election, has been SEC’s enforcement of Bitcoin and cryptocurrency. The SEC and president-elect Trump have been at odds over bitcoin treatment, and there is expected to be change in 2025 in SEC and Commodoties management of the cryptocurrency sphere. Additionally, Trump has advocated a strategic Bitcoin reserve and developing the Bitcoin mining industry in the United States. We will see how much is accomplished in 2025.
Remind me – what is Bitcoin again? What are cryptocurrencies?
Cryptocurrency is essentially a currency, security, and commodity mixed into one. It is all digitized. Bitcoin is the first cryptocurrency and is by far the most important and popular. Different cryptocurrencies exist which provide for different markets and have different applications. While Bitcoin is limited to 21 million coins, some cryptocurrencies allow for inflation, an unlimited number of coins, or other applications. The technology is incredibly versatile, and computer scientists are constantly developing it to fit certain markets.
An important aspect of cryptocurrency is what is known as the Blockchain – which is just a fancy term for a “ledger.” This ledger tracks all transactions relative to the coin, and acts as a memory record of each transaction, including time, sending wallet, and receiving wallet. In short, Blockchain is a decentralized record of each transaction using a cryptocurrency.
Should I care about Bitcoin? Why?
Yes. The practical applications are enormous, and the law is still developing. Companies are still figuring out practical applications for the technology, and various cryptocurrencies are in development. Unlike AI, the adoption has been much slower – likely because the cryptocurrency market shakes many foundational markets (such as currency, securities, and commodities exchanges).
It will take many, many years for the technology to be fully realized in the United States. It is something to keep an eye on.
