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March 3, 2025 | By: Paige Gross - Missouri Independent
By Paige Gross - Missouri Independent
State Sen. Daniel Verdin, of South Carolina, has spent the last month feeling optimistic about his cryptocurrency bill that proposes the state begin accepting digital currencies and become a friendlier place for digital asset mining.
He knows an issue like cryptocurrency isn’t an easy sell here — “the easy default position in a state like South Carolina is just to be conservative by nature,” he said.
Though he calls himself a “technological dinosaur,” the Republican lawmaker said he sees blockchain technology and digital currencies as a form of economic opportunity, especially for young entrepreneurs, investors, data managers and IT professionals.
Verdin wants South Carolinians to be able to purchase goods and services with crypto, for the state to limit taxes on crypto transactions, and allow them to participate in “data mining,” which creates new cryptocurrency.
The same bill failed in 2022, but Verdin feels the tide has changed. The state legislature has seen the biggest influx of freshman senators since World War II, many of whom are more open-minded to the technology, Verdin said. And federal policies may soon give him some momentum, with President Donald Trump saying he wants the country to be known as the “crypto capital of the planet.”
Verdin’s bill passed unanimously out of the state’s banking and insurance committee in the last week in February, and will be considered in the full senate at the start of March. He said it can be challenging to get legislators on board with evolving and sometimes controversial technologies, especially as he’s continuing to learn more about the cryptocurrency industry himself.
But the chance for people in South Carolina to participate in an emerging economic sector intrigues him.
“I want to think that it’s possible that … every generation or so, some form of revolutionary technology comes along that basically creates a moonshot for the entire society,” he said.
Though versions of electronic tender existed before Bitcoin was invented in 2008, the foundation of decentralized digital currencies that we know today as cryptocurrency was shaped by its launch. Cryptocurrencies are traded on a peer-to-peer network called blockchain, a public ledger that records all transactions. Bitcoin is the most used and recognized, but there are thousands of cryptocurrencies on the market.
Cryptocurrencies exist outside of traditional FDIC-backed financial institutions, and blockchain networks are not overseen by third parties or government regulators. The 2008 financial crash heavily inspired the creation and popularity of Bitcoin, as its founder, Satoshi Nakamoto, cited a need for more transparency in financial transactions in a white paper announcing its creation.
Transparency and the public ledger are still what draws a lot of people to cryptocurrency today, said Felix Shipkevich, an attorney and law professor teaching the legal and business impact of cryptocurrencies at Hofstra University.
“Every time there’s a transaction that’s recorded on this specific platform, it gets recorded in perpetuity and forever, and you can trace it back to the genesis block,” Shipkevich said.
Bitcoin mining is the process of logging transactions on the public ledger, and for introducing new bitcoins into circulation. Miners are issued a certain number of bitcoins in exchange for their work. The process uses hardware and software, and requires a lot of energy, which has caused some state legislators to consider restricting or banning the practice. In 2022, cryptocurrency consumed between 0.9% to 1.7% of the nation’s electricity usage.
Bitcoin in particular was designed with scarcity in mind, and to prevent inflation. Nakamoto designed the ledger to reach a maximum of 21 million Bitcoin, and about 19.5 million are in circulation today. Because these transactions exist on the software-based ledger, when you’re buying Bitcoin, you’re essentially “buying the code that demonstrates Bitcoin,” said Kyle Lawrence, a partner at NYC-based Falcon Rappaport & Berkman’s digital assets practice.
Most users see it as an investment, or a chance to build wealth, rather than actual currency, said Courage Kimber, a crypto analyst and educator based between the U.S. and France.
“That’s why people are hoarding it,” she said. “It’s like a store of value, like a form of digital gold.”
Kimber said she thinks cryptocurrencies operate from a place of privacy and self-sovereignty, which makes it typically a libertarian-leaning industry. The crypto market trades globally, around the clock, with no one specific area or agency to control it. Once purchased, cryptocurrency sits in the owner’s digital “wallet,” and the owner — not a government body or financial institution — has control over the asset.
“And I think that’s appealing to a lot of people,” Kimber said. “To people on both sides of the aisle.”
Though many people do treat their cryptocurrencies like shares on the U.S. stock market, the digital currencies have become more widely accepted as a legal form of payment. Some larger retailers, like Apple, Best Buy and Nike, and institutions, like the University of Pennsylvania’s Wharton School, accept payments via crypto.
Crypto has also become a tool for those looking to diversify their wealth portfolio, Lawrence said. He works with many young entrepreneurs who are less shy about “venturing into the unknown” and who want to play with their money a bit.
For those who have yet to participate in crypto, government regulations may make the industry seem more legitimate, and may make them more confident about jumping in, Lawrence said.
“You’re going to get more serious people in it who are not just in it to throw in 10 bucks and walk out with 20 at the end of the day,” Lawrence said. “It’s going to be more sustainable growth and lengthier holding periods, as opposed to these meme coins, which is an hour or two hours.”
The country has yet to see federal regulations of cryptocurrency, so states have proposed laws themselves as their residents navigate the industry.
Sen. Verdin’s bill, SB 163, proposes that South Carolinians be able to make purchases with digital currencies, and that the currency should not be subjected to additional taxes. It also allows individuals and businesses to participate in digital asset mining, as long as they follow local zoning laws, do not put excess strain on energy resources, or break sound pollution laws. Data centers that conduct cryptocurrency mining are notoriously loud because of necessary cooling fans to keep equipment from overheating.
South Carolina is one of many states which have considered how its residents could use cryptocurrencies and digital assets in recent years. During the 2024 legislative session, at least 35 states introduced or had pending legislation related to cryptocurrency, digital or virtual currencies, a report from the National Conference of State Legislators said.
Some states, like Indiana, Georgia and South Dakota, ban their government agencies from using digital currencies. Other states permit the technology, but may be placing frameworks around how it’s used, like in New Hampshire, which has a law to establish regulations and a framework for digital currencies, and Connecticut, which put more requirements on who may deal with digital currency transactions.
There’s no uniform way states are looking at the technologies involved in cryptocurrencies. Because cryptocurrency is available to be purchased by anyone with internet access, many legislative goals focus on how businesses, individuals and state departments may accept it as legal currency, like the U.S. dollar.
For the first time, it appears the federal government is interested in ways to enhance and grow the cryptocurrency industry, rather than regulate against it.
In his first week in office, President Trump signed an executive order to “promote United States leadership in digital assets” and “protect economic liberty,” by creating a working group to develop policies around crypto. It’s a sharp turn from his first term, in which he called crypto “highly volatile and based on thin air.”
The Biden administration had sought to keep crypto regulated. In 2023, the FDIC inspector disclosed letters asking financial institutions to “pause, or not expand, planned or ongoing crypto-related activities and provide additional information.” Biden’s Securities and Exchange Commission appointee Gary Gensler also had strong oversight of the industry, and the commission brought actions against crypto industry players for fraud, fictitious trading and other violations.
So far, the SEC under Trump’s direction has dropped its enforcement actions against Coinbase and Robinhood, two popular exchanges that trade cryptocurrencies, in anticipation of new incoming regulations that would likely differ from the enforcement actions pursued by Biden under older regulations.
In Trump’s executive order, he repeals Biden’s 2022 Department of the Treasury’s framework for digital assets, prohibits the promotion of central bank digital currencies (digital versions of U.S. tender), and asks a newly created working group to submit a report of legislative proposals that “considers provisions for market structure, oversight, consumer protection and risk management.”
Crypto experts say constructive regulation of the industry, rather than treating it as a threat to be constrained, will boost the industry and give it the legitimacy it needs to go mainstream. They hope Trump’s friendly words and actions will help.
Instead of being adversaries with the SEC, maybe leaders in the crypto space could partner with the agency in creating some of these regulations, Kimber said.
Shipkevich, however, looks at crypto enthusiasts with more skepticism, based on his work in financial litigation and instructing attorneys on the legal landscape in the crypto market.
“Are cryptocurrencies going to be beneficial for our society? Will they be good? Will they be able to provide some kind of utility for our society, in our country or the world?” he said. “That’s the question that we should be asking.”
But Trump’s attitude reversal, his executive order and appointment of an “AI and crypto czar” are providing a lot of hope for people in the industry and those who have invested their wealth into it, Shipkevich said. Unlike other facets of the tech industry, regulations around crypto stand to make the industry more legitimate, rather than hinder it, he said.
“I think that’s what the crypto industry is looking for … Not necessarily to look for the new Wild, Wild West,” Shipkevich said. “But to really see more clarity, rather than just a prohibition or the very unfriendly environment that it’s seen under the Biden administration.”
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