04/01/2025 09:00 AM Senate FINANCE

SENATE BILL NO. 86                                                                                                            
                                                                                                                                
     "An   Act   relating   to   the   business   of   money                                                                    
     transmission;   relating   to    licenses   for   money                                                                    
     transmission, licensure  requirements, and registration                                                                    
     through  a  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 exemptions  to money transmission licensure                                                                    
     requirements; relating to  payroll processing services;                                                                    
     relating to currency  exchange licenses; amending Rules                                                                    
     79  and  82,  Alaska  Rules  of  Civil  Procedure;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:02:22 AM                                                                                                                    
                                                                                                                                
Senator Jesse  Kiehl, Sponsor,  explained that  SB 86  was a                                                                    
modernization   of  laws   related  to   cryptocurrency.  He                                                                    
mentioned  other  customer  protections   in  the  bill.  He                                                                    
discussed  a tiered  fee structure  that would  be based  on                                                                    
volume.  He  thought the  bill  was  well crafted  to  avoid                                                                    
double-regulation.  He clarified  that nothing  in the  bill                                                                    
stifled innovation.  There were  no rules  and no  limits on                                                                    
risk  Alaskans  could take  on  Bitcoin.  He mentioned  that                                                                    
DCCED Director of Banking and Securities was present.                                                                           
                                                                                                                                
9:10:43 AM                                                                                                                    
                                                                                                                                
Senator Kaufman  asked if there  was any situation  in which                                                                    
the transfer of money was not included in the bill.                                                                             
                                                                                                                                
Senator  Kiehl  used the  example  of  a payroll  processor,                                                                    
which was not included in the bill.                                                                                             
                                                                                                                                
9:13:20 AM                                                                                                                    
                                                                                                                                
ROBERT   SCHMIDT,   DIRECTOR,   DIVISION  OF   BANKING   AND                                                                    
SECURITIES, DEPARTMENT OF  COMMERCE, COMMUNITY, AND ECONOMIC                                                                    
DEVELOPMENT,  explained that  his  division was  responsible                                                                    
for regulating  the issues outlined  in the bill.  He stated                                                                    
that the  first mobile  payment application was  when PayPal                                                                    
released its  beta version in  2008 for the  Blackberry, and                                                                    
stated that  most of what  was money  transmission currently                                                                    
was not present when the  law was written. He expressed that                                                                    
the current  statutory framework in the  state, and affirmed                                                                    
that  the  bill  would  protect  consumers  as  the  sponsor                                                                    
suggested. He used the example of selling artwork.                                                                              
                                                                                                                                
9:19:32 AM                                                                                                                    
                                                                                                                                
Mr. Schmidt addressed  a fiscal note from  DCCED Division of                                                                    
Banking and  Securities, OMB Component 2808.  He was pleased                                                                    
to   report   that   the  program   that   regulated   money                                                                    
transmission  did  not  pay for  itself.  He  described  the                                                                    
industry  as one  of "minnows  and  whales", and  emphasized                                                                    
that the  net effect of the  bill would be positive  for the                                                                    
state.                                                                                                                          
                                                                                                                                
9:27:04 AM                                                                                                                    
                                                                                                                                
Mr. Schmidt  summarized that the  committee would  hear from                                                                    
industry representatives.                                                                                                       
                                                                                                                                
Co-Chair Hoffman OPENED public testimony.                                                                                       
                                                                                                                                
9:28:49 AM                                                                                                                    
                                                                                                                                
ADAM  ATLAS, ADVISOR,  MONEY SERVICES  BUSINESS ASSOCIATION,                                                                    
MARYLAND (via  teleconference), testified in support  of the                                                                    
bill.                                                                                                                           
                                                                                                                                
9:32:55 AM                                                                                                                    
                                                                                                                                
ADAM   FLEISCHER,   COUNSEL,  MONEY   SERVICES   ROUNDTABLE,                                                                    
WASHINGTON DC (via teleconference),  spoke in support of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Hoffman CLOSED public testimony.                                                                                       
                                                                                                                                
Senator Kiehl addressed the fiscal note.                                                                                        
                                                                                                                                
SB  86  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.