H.R. 1747 would exempt certain blockchain developers and networks from financial reporting and licensing requirements required under current federal and state laws. Blockchain is a distributed ledger technology that records and shares every transaction that occurs among users in a system of networked computers. Under current law, money transmitters—businesses that provide money transfer services or payment instruments—are regulated and licensed at the state level and are subject to anti-money laundering reporting requirements at the federal level.
Some blockchain developers and networks control their users’ digital assets by providing “hosted virtual wallet” services in which they store and exchange virtual currency on behalf of their users. Under the bill, blockchain developers or networks that do not provide “hosted virtual wallets” could not be treated as money transmitters, and thus would not be subject to the reporting requirements.
Based on information from the Financial Crimes Enforcement Network (FinCEN) and subject matter experts, CBO expects that H.R. 1747 is largely consistent with the agency’s current regulations and would largely codify existing policies and guidance. However, the bill could provide a safe harbor for a small number of entities who are currently subject to federal anti-money laundering regulations. As a result, CBO estimates that FinCEN would incur administrative costs of less than $500,000 over the 2024-2028 period to issue new guidance and conduct outreach to the private sector. Any spending would be subject to the availability of appropriated funds.