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It is no secret at this point that cryptocurrency as an industry is on the rise. While it was underground for many years, the last year has seen major tokens like Bitcoin and Ether reach new all-time price highs, spot ETFs become a reality, and more institutional support of the asset class than ever before. This has led to consumers embracing the asset class in droves, with more active crypto wallets than ever before. As Shraddha writes, existing tokens are in high demand among consumers, and new Binance listings are met with fanfare and excitement.
There are a lot of financial benefits to countries and states thanks to the crypto boom, and South Carolina can position itself to benefit from it. It is worth noting that the Trump administration is notably pro-crypto, with the Securities and Exchange Commission being given an acting chairman who is favorable to the industry compared to his predecessor.
But how can South Carolina join the ranks of states benefiting from cryptocurrency? One of the first steps would be the establishment of a crypto reserve. While the idea of a governmental body storing cryptocurrency was unthinkable a few years ago, it has quickly become a reality. As of this article, there are at least 21 states in the US that have created strategic Bitcoin reserves or are looking into doing so. The fact that cryptocurrencies have proven to be so valuable, with Bitcoin surpassing gold as the top asset of the 2010s, means that states have a lot to benefit from investing in them. If South Carolina can do the same, it will not only benefit from the crypto boom but will ensure that it doesn’t fall behind other states in this regard.
Another thing that can be done is formal recognition of crypto mining centers as data centers. A decade ago, the state passed a law that would incentivize data centers from companies like Meta and Google to set up shop. These included tax incentives and other such perks. While these have attracted the data centers, little has been done to formally recognize crypto mining operations within the same category. It is worth noting that crypto mining centers can give energy back to the grid if needed, unlike traditional ones. If the law is adjusted to recognize crypto mining centers, the state can further attract them.
The growth of cryptocurrency will inevitably mean that the demand for tokens will increase. As a result, data centers will become more prominent and with this will come tax revenue, job creation, and so on. Several locations around the world are already optimizing their landscape to attract these crypto mining operations, and South Carolina should do this as well.
Finally, we cannot ignore the foundation of regulatory support in the form of the states’ commercial code. In 2022, the nonpartisan Uniform Law Commission recommended amendments to the Uniform Commercial Code that would include digital assets and blockchain technology. Several states have already implemented this, and South Carolina could follow their lead. By doing this, the treatment of digital assets, their creators, and the businesses that deal with them will be properly stated. This means that non-crypto businesses will feel free to embrace digital assets, crypto-focused businesses will move to the state, and consumers will have guidance and protection as they engage with digital assets.
Cryptocurrency is clearly not going anywhere, and rather than resist change, South Carolina is in the advantageous position to adjust these regulations and welcome it. With this, it can reap the long and short-term benefits, as other states have done.
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