Let’s be the leader in blockchain technology and digital currency, not the follower.
Attracting new technologies and digital innovations requires substantive policy changes here in Arizona. The vast majority of elected officials on the state and local level are clueless to this need for transformation. This is pretty clear when some vote against logical digital framework legislation (HB2601). Our state can and should be a leader in in this area and it starts with establishing frameworks for digital currency recognition. Other states such as Wyoming have propelled themselves to the spotlight by setting up legal structures for the advancement of blockchain technologies and digital currency. It is about time Arizona surpasses them to benefit from the digital revolution.
First, let’s define blockchain:
"A blockchain is an immutable decentralized ledger:
Immutable — each new block essentially locks in previous blocks
Decentralized — a peer-to-peer network of computerized contributors creates new blocks
Ledger — a list (i.e., a chain) of individual records (i.e., blocks) (Source)"
Arizona made some progress over the last several years, but still has a long way to go in order to become an industry leader. In 2019, the Arizona legislator allocated $1.25 million for “distribution to applied research centers that specialize in blockchain technology.” 2019 AZ H.B. 2747 (NS). Considering the economic benefits from research in this area, the investment should be 10-times higher.
Moving Arizona forward as a digital leader will require action. It will also require elected officials that understand such technology. Granted, I am not an expert by any means, but I do have a solid grasp on the benefits and positive impact this policy plan will have for our state economy.
Putting in place flexible yet careful regulatory frameworks are essential. Arizona should keep consumers safe while also allowing new business opportunities to flourish. This five point policy plan will promote the digital revolution in Arizona and put us on top as a leader rather than a follower.
- Clearly define the legal properties of blockchain assets & digital tokens.
- Exempt digital currency from securities and money transmission license regulations.
- Establish a fully-reserved fiat bank charter: Digital Purpose Depository Institutions (DPDI) to serve as a custodian of digital assets.
- Permit the use of digital currency to pay taxes, transact business dealings and require public ledger tracking for transparency.
- Increase research and development grants to $15 million per year by 2025.
Arizona can and should be the go to place for digital innovation. Setting up the proper frameworks and attracting new businesses will have a profound impact on our state. It is time we take advantage of this opportunity and for Arizonans to benefit from it.