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Cryptocurrencies have recently emerged as a revolutionary force in the world of finance. They've taken the US by storm and each state has its own stance on their adoption.
Some of them, like Texas and Wyoming, are known for their friendly approach towards cryptocurrency. But what's Pennsylvania’s stance on the crypto sector?
The state was known for taking a more uninvolved approach to cryptocurrency but we’ve recently seen this starting to change. In April 2024, the Pennsylvania Department of Banking and Securities issued a policy statement clarifying that it interprets virtual currency as money.
This means that virtual exchangers and other businesses in the industry that operate in Pennsylvania will have to be licensed as money transmitters starting in October this year.
With this, Pennsylvania has joined about half of all other states in regulating digital currencies under money transmission laws.
For regular users of crypto, not much has changed. Cryptocurrencies can be used in the same ways as in other states.
Pennsylvanians can use cryptocurrencies as they wish when making transactions. This includes everything from paying for products and services to investing in digital assets.
With online gambling allowed in the state, many Pennsylvanians also choose to play either in credit card casinos or in ones that use Bitcoin and other digital currencies. Those wanting to play in a real money online casino can use it for this activity as they wish.
Ever since cryptocurrencies emerged as a popular means of payment, Pennsylvania has been adapting to the landscape.
Penn University became the first Ivy League college to accept cryptocurrency for course payment. The university's Wharton School of Business also offers its Wharton Blockchain and Digital Asset Project which focuses on implications of the popular distributed ledger technology for governments, businesses, and individuals.
Also, ever since China banned cryptocurrency mining in 2021, mining operations have shifted to the US with many companies moving to Pennsylvania. It has emerged as a desirable location due to its various energy options such as nuclear power and waste coal.
However, due to the environmental effects of the activity, there have recently been some discussions on what the state's approach to it should be.
This year, we even saw an environmental community group, Save Carbon County, sue Stronghold Digital Mining Inc. for polluting. The group said that the company's bitcoin mine burns waste coal and old tires for energy, thus polluting nearby communities and exposing them to dangerous chemicals.
Reportedly, people living near the plant have had masses of soot accumulate on their windowsills, gardens, and yards. The group also said that Stronghold had released mercury into waterways and spewed harmful chemicals into the air.
Mining cryptocurrencies also requires large amounts of electricity. According to the Energy Information Administration, the activity makes up for 0.6% to 2.3% of the entire energy consumption in the US.
As Pennsylvania is looking to fight issues like this, it may become less welcoming to companies that want to use such energy options for their mining operations.
There have already been some pushes to regulate the situation better but they ended up being unsuccessful. The two-year moratorium on crypto mining permits, proposed by Representative Greg Vitali has been removed and his bill now focuses on reporting by mining companies and an impact study from the Department of Environmental Protection.
With such efforts being made to address the impact cryptocurrency mining has on the environment, it's likely that we'll see Pennsylvania push harder in the future.
In terms of cryptocurrency scams, like in most other states, there have been such occurrences in Pennsylvania. Earlier this year, an anonymous victim claimed to have lost tens of thousands of dollars in one.
However, frauds in the cryptocurrency industry are a worldwide problem and it's something that the entire industry has to tackle. For victims in the US, it's sometimes impossible to recover stolen investments as cybercriminals often operate in countries that don't have extradition treaties with the US.
In a separate case, a Colorado man, originally from Pennsylvania was sentenced after stealing millions in cryptocurrency. Between 2014 and 2021, he transferred $2.1 million to his account after being to assist a Bucks County woman in managing her investments.