Federalize money transmission regulation to let mobile payments and virtual currencies flourish
  • Petitioning United States Senate Committee on Banking, Housing and Urban Affairs

This petition will be delivered to:

United States Senate Committee on Banking, Housing and Urban Affairs
U.S. Senate
Rhode Island
Sen. Jack Reed
Sen. Richard Shelby
Sen. David Vitter
Sen. Jon Tester
North Dakota
Sen. Heidi Heitkamp
New Jersey
Sen. Robert Menendez
New York
Sen. Charles Schumer
Sen. Sherrod Brown
Sen. Dean Heller
Sen. Bob Corker
Sen. Elizabeth Warren
Sen. Tom Coburn
North Carolina
Sen. Kay Hagan
Sen. Jeff Merkley
Sen. Mark Warner
Sen. Mark Kirk
Sen. Jerry Moran

Federalize money transmission regulation to let mobile payments and virtual currencies flourish

    1. Petition by

      Aaron Greenspan

Mobile payments and virtual currencies (such as Bitcoin) could be far cheaper than plastic payment (debit/credit) card processing for merchants. The reason they aren't widely accepted yet is because the banks and card companies have been blocking their new competition using a patchwork of deliberately inconsistent and vague state laws. These laws are arbitrarily enforced, poorly understood (even by Congress), and amount to nothing more than economic protectionism.

There are roughly forty-seven state money transmission laws in the United States. As a result, there are zero legal Bitcoin exchanges (licensed in every state where they have customers.) If you want to start a business that competes with the banks and credit card networks, that means you need forty-seven licenses. If you are not licensed in every state, 18 U.S.C. § 1960, the federal law that delegates Congress's commerce clause authority to the states (written in 1992, before the commercial internet existed) can put you, your investors, and your sharehodlers, in jail.

All of this is supposed to combat fraud, and in the early 1990s, Congress was trying to stop drug trafficking. In 2001, the USA PATRIOT Act amended 18 U.S.C. § 1960 to try to prevent terrorism. Now, in a world with the internet and mobile payments, financial industry groups such as The Money Services Round Table have written their own template legislation to take advantage of the law and block competition because plastic cards simply don't make sense anymore. Through their lobbyist, Ezra Levine, they've been successful so far in California, Hawaii, Oregon, Minnesota, Washington, Iowa, West Virginia, Illinois, Wyoming, North Carolina, Florida, Idaho, North Dakota, New Jersey, Tennessee, Maine, Vermont, Arizona, the District of Columbia and Indiana.

Consumer protection is a legitimate need and government interest. The federal government should assume control of money transmission regulation, ending the reign of confusing state money transmission laws. FinCEN and the CFPB within the United States Department of the Treasury are already well equipped for the task, and would be infinitely more effective than the states at catching criminals. (As it is, the states have never mounted a successful Bitcoin sting operation and are woefully behind technologically-speaking.) An FDIC-like pooled insurance scheme for money transmitters can better protect consumers relative to the existing broken patchwork of surety bonds, which are so expensive that they actually drive otherwise-legitimate operators underground.

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Recent signatures


    1. Reached 10 signatures


    Reasons for signing

    • Fuji Shioura CHICAGO, IL
      • 7 months ago

      The future is here. We can no longer wait for policy makers with a technology understanding of Rolodexes, typewriters & rotary phones decide our future. The internet is real. Let's act now so we can offer a better standard of living for our children by modernizing our economy. Sincerely, FUJI FOR US SENATE, Illinois Election 2014

    • Troy Cross PORTLAND, OR
      • 11 months ago

      I don't want the US to fall behind China in the development of crypto-based currencies and the efficiencies and businesses and jobs that come with them. Please don't act as paid protection for the banking monopoly.


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