North Carolina enacts electronic currency law, virtual currency transfers boom

North Carolina has updated its money transmitter statute in an effort to clarify the rules for e-money startups.

Gov. Pat McCrory signed North Carolina's money transmitter legislation last week at the request of the state's Office of the Banking Commissioner.

According to the Office of Electronic Commerce of the Washington Bitcoin and Blockchain Exchange Association, which is backed by USAA Insurance , the DTCC and Ripple, the world’s first open payment network that can transfer any currency, the updated regulations effectively help the state define currency, including “virtual currency.”

The Office of Commerce said it has worked with state bank governors and the General Assembly over the past 16 months to help create a more business-friendly policy.

The office said cryptocurrency miners and blockchain software providers, including smart contract platforms, do not need business licenses in North Carolina.

Simply put, most commercial transactions are exempt from the regulation, which targets individuals, families and daily money transfers.

"Beyond that, it will be interesting to see how the state defines the intermediary space," said Carlo van Cleef, a partner at Manatt Phelps & Phillips. For example, many bitcoin companies see a good opportunity in the remittance industry. It is unclear whether transactions handled by remittance companies are commercial transfers or personal needs of customers to send money home.