On May 1, Vermont changed its money transmitter law to allow companies to hold virtual currency as a permissible investment. Vermont has long held the position that the business of money transmission “includes selling bitcoin and other virtual currencies.”

Many digital currency companies with state money transmitter licenses must hold a certain amount of permissible investments in addition to maintaining a bond and subjecting their books to examination by state regulators. The new law makes clear that virtual currency counts as a permissible investment, but “only to the extent of outstanding transmission obligations received by the licensee in identical denomination of virtual currency.”

The law defines “virtual currency” as “stored value that: (A) can be a medium of exchange, a unit of account, or a store of value; (B) has an equivalent value in money or acts as a substitute for money; (C) may be centralized or decentralized; and (D) can be exchanged for money or other convertible virtual currency.”

We encourage you to review the full law here.

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