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Utah Moves into Pole Position — We Talk to the Utah Legislator Behind the Pro-Crypto Push in Utah19 April 2022
We rightfully look at efforts to regulate cryptocurrency with deserved skepticism, but that’s not to say all government action regarding digital currency is, perforce, negative.
Governments can adopt strategies and create tools that facilitate rather than retard the crypto market, and it looks like the state of Utah has that in mind with a slew of what appear to be positive, industry-friendly steps in the form of three bills recently signed into law.
“We really want to stay in the forefront of not just making Utah more attractive to the tech companies we talk to, but in adopting these very technologies that the companies we bring here use and invest in,” the lead sponsor of two of those bills, State Rep. Jordan Teuscher, told us. “Every tech company is looking to the Silicon Slopes because of the talent we have here, and because our regulatory environment.”
Utah, of course, has a far western, libertarian and market-driven culture, and it’s served the state well in terms of both the state’s unrivaled economic performance this last decade and through the pandemic. It’s also turned Utah into the new hotspot for tech companies looking for the best talent and the best business environment.
This is not just some Chamber of Commerce cheerleader talk.
The technology sector has become the biggest driver of commercial real estate leasing in the Salt Lake City area, according to a recent report by the national real estate services firm Cushman & Wakefield. In fact, what they found was that the Salt Lake City metropolitan statistical area, which includes Salt Lake and Tooele counties, was second only Silicon Valley in the percentage of commercial leases signed by tech companies in the period surveyed — 66% vs 78%. (This was just before the pandemic put the office real estate market into holding pattern that it has since recovered from in Utah.)
The flat personal income tax with a rate of less than 5%, the forward-looking pension reform efforts, property tax transparency, and growing tech workforce are just icing on the cake.
The result? The last decade was a period of tremendous growth for Utah’s tech sector, with the state adding more than 47,000 tech jobs, according to a CompTIA report. The Salt Lake City tech world includes dozens and dozens of quickly rising independent firms as well as industry leaders, from Overstock.com to Ancestry.com, and including Quickbase, Atomic Financial, Artemis Health and others like our own Silvermint.
Teuscher told us that the two bills he sponsored and the additional state senate bill on crypto was an effort to continue this momentum.
“We’re one of the leaders but we are playing catch up with Wyoming,” Teuscher said. “But the advantage there is we can learn from what they did right and wrong, and I think that’s reflected in these measures and it will inform our discussions going forward.
He three measures themselves look like this.
The first, HB 335, creates a “Blockchain and Digital Innovation Task Force” with the purpose of developing knowledge and expertise about blockchain and related tech, and make policy recommendations regarding same to the appropriate legislative committee.
The second, HB 456, requires the Division of Finance to contract with a third party in order to accept payments in the form of digital assets. This will also give the division their own rulemaking authority to determine the standards a third party must meet to provide these payment services.
“We need this to make it possible for people to pay in crypto the fines, taxes or fees that go along with operating a business in the state of Utah,” Teuscher told us. “For instance, it doesn’t make sense for one of our state’s legal marijuana growers to have to come pay their taxes carrying literally millions in cash. And this is one of the things the tech companies we talk to about relocating to Utah say they want.
The third bill, SB 182, establishes a framework of ownership for digital assets. This creates a secure, private right for owners over digital transactions.
It may seem a little basic, but not a lot of states have even taken up consideration of crypto. They look at it with the same confusion that a Baby Boomer might look at a new dance challenge trend on TikTok.
On the surface all of these bills seem like positive tools for government to start working with the crypto industry, and putting it on equal footing with the rest of the financial industries.
That said, what will bear close scrutiny from us will be the actual recommendations this blockchain and digital task force come up with, and what the legislative committees do with those recommendations. This can always be abused, but given the prosperity that the tech industry has brought to Utah, it’s hard to imagine them wanting to kill the golden goose.
Still, best to always keep them under watch.