Alabama lawmakers, businesses, and public and private sector leaders met on Tuesday to discuss how to regulate the crypto market and blockchain technology for the benefit of all stakeholders, as the technology becomes an integral part of the Alabama economy.

Representatives of financial services providers including banks, large and small businesses, energy companies, state agencies, legal fraternity, and legislators took part in the discussion with the Alabama Blockchain Study Commission.

Alabama lawmakers to study crypto industry

The commission is chaired by Sen. Greg Albritton, R-Atmore, who is also the chair for the Senate’s General Fund Budget, while Alabama Securities Commission director Amanda Senn was selected as the deputy chair.

Albritton created three subcommittees who will study and explore ways to regulate the blockchain and cryptocurrency industry.

These subcommittees are also tasked with finding ways to protect the public as well as finding the best applications of blockchain technology for both the private and public sectors.

Senn highlighted that there are some gaps in Alabama’s blockchain and cryptocurrency services providers. Senn also said several companies had mushroomed in the crypto industry operating like banks and investment firms. However, these companies are not subject to the same rules and regulations that govern companies in this category.

As a result, the Alabama Securities Commission has been probing cases of fraud including cryptocurrency for about 10 years.

“Right now, it’s the wild, wild west in the crypto industry.”

Senn.

Due to a lack of safeguards, there has been a lot of concerns over cryptocurrency being misused for money laundering and for terrorism funding in foreign states.

She also expressed concerns over the financial exploitation of senior citizens and that both consumers and investors are not protected the same way they would be when doing business with traditional financial institutions including banks.

Superintendent of banks for the Alabama State Banking Department Mike Hill echoed the concerns on the lack of regulation for crypto companies. He added that traditional banking service providers are regulated and implement KYC partly to prevent money laundering.

Via @rchapoco: Lawmakers and regulators met Tuesday to study the impacts of a novel technology for Alabama as it becomes a more significant part of the public sphere. https://t.co/81GsuKFvAn #alpolitics

— Alabama Reflector (@ALReflector) July 31, 2024

Stakeholders call for a balance between regulation and innovation

Alabama Blockchain Alliance’s Wade Preston said the blockchain tech and crypto provide great potential for both public and private sectors and, therefore all efforts at regulating the sector should recognize that.

He highlighted that cases of fraud were not exclusively tied to blockchain technology or cryptocurrencies. As such there is no need to impose stringent rules and regulations that may inhibit innovation in the industry.

He noted the need to embrace innovation in line with global trends, saying people were reluctant to make online credit card purchases two decades ago, but it is now standard practice.

“And I think our right to transact, our freedom to transact, is a fundamental right. It’s a right that everything else is predicated on.”

Preston.

Preston highlighted why blockchain technology and crypto are crucial for Alabama as “it affords us a real freedom to transact without another intermediary.”

President and CEO of the Business Council of Alabama Helena Duncan, who has worked in the banking industry emphasized the need to strike a balance between regulation and promoting innovation. Duncan claimed regulation is not bad and ensures risk is minimized.