(The Center Square) – Illinois lawmakers are considering additional regulations on the cryptocurrency industry.
The Illinois House is set to debate legislation that the state Senate already approved. Senate Bill 1797 provides that the Illinois Department of Financial and Professional Regulation regulate digital asset business activity.
State Sen. Mark Walker, D-Arlington Heights, said his approach is to use IDFPR’s capabilities in the area of financial institutions.
“They know how to build anti-fraud programs, money-laundering programs, identity protection programs, security programs and use that expertise to build into this industry,” Walker said.
State Sen. Sue Rezin, R-Morris, said the bill framework mirrors current laws applied to banks and credit unions.
“It’s counterintuitive, as the cryptocurrency industry was specifically set up to provide consumers with alternative financial options that aren’t as regulated or as centralized,” Rezin said. “There are already numerous regulations at the federal and state level which protect consumers participating in the cryptocurrency market.”
State Sen. Jason Plummer, R-Edwardsville, said putting IDFPR in charge of licensing could slow the process for small businesses.
Plummer told Walker on the Senate floor that similar legislation crushed growth in New York’s crypto industry.
“Do you have concerns as to this legislation, as well-intended as it may be, putting a brick on the industry’s growth here in the state of Illinois?” Plummer asked Walker.
Walker said less than 25% of potential adult investors trust cryptocurrency businesses.
“I think that, if they don’t fix their fraud problem in the public’s mind, this industry will not grow,” Walker answered.
According to SB 1797’s second Senate floor amendment, ”digital asset business activity” does not include peer-to-peer exchanges or transfers of digital assets.
The chief House sponsor of the bill is state Rep. Edgar González, Jr., D-Chicago. The measure is now in the House Financial Institutions and Licensing Committee.