Legislature(2021 - 2022)

2022-03-25 Senate Journal

Full Journal pdf

2022-03-25                     Senate Journal                      Page 2118
SB 238                                                                                                                        
SENATE BILL NO. 238 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "An Act relating to the business of money                                                                             
          transmission; relating to money transmission                                                                          
          licenses, licensure requirements, and registration                                                                    
          through the Nationwide Multistate Licensing System;                                                                   
          relating to the use of virtual currency for money                                                                     
          transmission; relating to authorized delegates of a                                                                   
          licensee; relating to acquisition of control of a                                                                     
          license; relating to record retention and reporting                                                                   
          requirements; authorizing the Department of                                                                           
          Commerce, Community, and Economic Development                                                                         
          to cooperate with other states in the regulation of                                                                   
          money transmission; relating to permissible                                                                           
          investments; relating to violations and enforcement                                                                   
          of money transmission laws; relating to money                                                                         
          transmission license exemptions; relating to payroll                                                                  
          processing services; repealing currency exchange                                                                      
          licenses; and providing for an effective date."                                                                       
was read the first time and referred to the Labor and Commerce and                                                              
Finance Committees.                                                                                                             

2022-03-25                     Senate Journal                      Page 2119
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, Department of Commerce, Community, and                                                                      
  Economic Development                                                                                                          
Governor's transmittal letter dated March 23:                                                                                   
Dear President Micciche:                                                                                                        
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to the modernization of                                                         
state money transmittal laws.                                                                                                   
This bill would modernize Alaska's money transmission laws through                                                              
adoption of pertinent sections of the Uniform Money Transmission                                                                
Modernization Act (Model Law), which was developed by the                                                                       
Conference of State Bank Supervisors (CSBS) with input and                                                                      
participation from industry stakeholders. Among other changes, the                                                              
proposed bill would amend the Uniform Money Services Act                                                                        
(AS 06.55) to allow regulation of transmission of virtual currency,                                                             
eliminate currency exchange as a separate license type, and clarify                                                             
regulation of payroll processing.                                                                                               
Adoption of this bill would allow the Department of Commerce,                                                                   
Community, and Economic Development (DCCED) to protect                                                                          
Alaskan consumers through regulation of virtual currency                                                                        
transmission. The Uniform Money Services Act was adopted in 2008                                                                
before internet-based fintech business models, virtual currencies and                                                           
mobile phone applications were regularly in use. Today, virtual                                                                 
currency transmission accounts for over $2.3 billion annually, nearly                                                           
one-third of money transmission volume in Alaska. In 2021, it grew                                                              
by 2,420 percent. Since 2019, it has grown 6,782 percent. Expanding                                                             
the current law to include cryptocurrency will close a significant                                                              
loophole, protect consumers, and ensure the safety and soundness of                                                             
the businesses interacting with Alaskans. Recent and reasonably                                                                 
foreseeable geopolitical events make regulating virtual currency even                                                           
more important.                                                                                                                 

2022-03-25                     Senate Journal                      Page 2120
Adoption of key components of the Model Law will also allow                                                                     
DCCED to coordinate with other states while more effectively                                                                    
utilizing state resources. This change would benefit licensees by                                                               
adopting a standardized nationwide multistate licensing process.                                                                
I urge your prompt and favorable action on this measure.                                                                        
Mike Dunleavy