The Alabama Joint Blockchain Study Commission met on Thursday with state legislators, cryptocurrency advocates, and representatives of the Alabama Securities Commission in attendance.
The commission was created last year by a joint resolution penned by state Senator Greg Albritton, R-Atmore. The resolution’s preface states that “the nationwide growth of blockchain and cryptocurrency technology presents opportunities to increase Alabama’s standing as a national leader in the technology and financial services industries.”
Cryptocurrency has attracted significant attention in recent years, both positive and negative. The 2022 fall of crypto exchange FTX and its billionaire founder, Sam Bankman-Fried, reinforced a long-standing association of the industry with financial fraud and criminal activity, as did the more recent “pump-and-dump” scheme behind Hailey Welch’s promotion of a “Hawk Tuah” themed meme coin.
Environmental activists have also pointed to the significant energy costs of cryptocurrency mining operations. A February 2024 report from the U.S. Energy Information Administration estimated that as much as 2.3 percent of American energy consumption was being used for cryptocurrency mining.
Similarly to what transpired in the inaugural meeting of the commission last year, the assembled commission members weighed the risks and potential benefits of encouraging or regulating cryptocurrency use in Alabama.
One commission member, Wade Preston of the Alabama Blockchain Alliance, favorably compared cryptocurrency to fiat currency, claiming that “our fiat currency is imaginary and it is almost entirely digital at this point. The difference between a solid secure decentralized cryptocurrency … and the fiat currency is transparency.” He specifically criticized fiat currency for making people “hold our breath every time Jerome Powell steps up to a microphone.”
It is important to note that while Bitcoin and other major cryptocurrencies are often pitched as an alternative to a supposedly unstable and inflationary dollar, their performance and prices are closely correlated with the performance of the American stock market.
Calling in via Teams, Representative Anthony Daniels, D-Huntsville, provided an update on a subcommittee’s discussion of the potential uses of cryptocurrency in state government. “We’ve determined that being in wait-and-see mode to see how the administration addressed this issue [will be best],” he said. “But we’ll be open-minded enough to look at other states and continue to convene as a committee and invite those individuals that are more familiar with it.”
Senator Bobby Singleton, D-Greensboro, took a somewhat skeptical stance at points during the commission meeting as a member of the consumer protection subcommittee. “I would suggest that we continue to move forward. Despite whatever the feds are going to do, we still have to be responsible for the state of Alabama,” he said. “And as it’s coming to our state, I think we should continue to listen to other experts, learn as much as we possibly can, be prepared to set up those guardrails for consumer protections, and be open-minded to the industry as it develops, yet still making sure that we’re protecting our citizens in this state.”
While Democratic politicians like Singleton do tend to be more skeptical of cryptocurrency than Republicans, this is not a strict rule. State Senator Merika Coleman-Evans, D-Midfield, has prefiled a bill, SB17, for the upcoming legislative session that would dramatically restrict the state’s ability to regulate the industry.
SB17 states that “the state shall not prohibit, restrict, or otherwise impair the ability of an individual” to use or hold cryptocurrency for legal purposes. The bill would also exempt transactions under $200 where a cryptocoin is used as a currency from capital gains taxes and require cryptocurrency mining operations be treated like other data centers. It will be considered by the Senate Committee on Banking and Insurance when the legislative session begins.
Alabama’s newest Democratic Congressman, Shomari Figures, has also been exceptionally friendly to the industry. After receiving millions from pro-crypto PACs, Figures signed a letter to the DNC cautioning against the party opposing cryptocurrency.
Figures’ support for crypto is especially important because, as commission members repeatedly stated during the meeting, federal regulation is likely the most important factor in determining the industry’s future. “I think the biggest change from last meeting to this meeting is the administration in D.C.,” Amanda Senn of the Alabama Securities Commission said. “They have experts that are guiding their policies as well and we’re paying attention down here.”
President-elect Donald Trump seems likely to encourage the growing industry during his second term. Bloomberg reported yesterday that inside sources say Trump will likely issue an executive order labeling cryptocurrency a “national imperative or priority.” Paul Atkins, Trump’s nominee to lead the Securities and Exchanges Commission, is a noted crypto enthusiast which Trump touted in his announcement of the nomination.
Near the end of Thursday’s commission meeting, the commission resolved to work with Innovate Alabama and gather business leaders with cryptocurrency expertise who could discuss the industry with legislators during the 2025 legislative session.
