The US Conference of State Bank Supervisors (CSBS), an organization comprised of representatives from state-level banking regulatory bodies, has released the final version of its model regulatory framework for digital currencies.
The group recommended that companies involved with third-party exchange or transmission of digital currencies, as well as “services that facilitate the third-party exchange, storage and/or transmission of virtual currency (e.g. wallets, vaults, kiosks, merchant-acquirers, and payment processors)” should fall under the oversight of state bank regulators.
The definition of virtual currency also has been a common and key issue raised by commentors, and the CSBS provided a final version that tates that states can use to clarify the scope of their statutes and promote consistency over state lines.
Virtual Currency is a digital representation of value used as a medium of exchange, a unit of account, or a store of value, but does not have legal tender status as recognized by the United States Government. Virtual Currency does not include the software or protocols governing the transfer of the digital representation of value. Virtual Currency does not include stored value redeemable exclusively in goods or services limited to transactions involving a defined merchant, such as rewards programs.
The framework also includes recommendations for a nationwide data sharing system based on the Nationwide Multistate Licensing System, a network used for financial institution licensing. The American Bankers Association indicated its support for this approach earlier this year, and according to the CSBS, several unidentified companies in the digital currency space have voiced support for the proposal.