This past Wednesday, March 27, the Committee on Commerce and Labor of the Nevada Senate heard SB161, a bill to establish the Regulatory Experimentation Program for Product Innovation in the state. Introduced by Senator Ben Kieckhefer (R), this bill seeks to create a kind of FinTech sandbox to enable businesses developing innovative products in the state to obtain certain regulatory waivers and receive limited access to Nevada's marketplace. These waivers would be in effect for as long as the companies were in the program.
Although the bill comprises several sections, it essentially outlines important definitions (e.g., the contextual meaning of the word "innovation"), the program's approval process, who would oversee the program, and the product experimentation time frame (two years with a one-year extension, if granted), among other ancillary components. According to Senator Kieckhefer, SB161 was modeled after Arizona's FinTech sandbox, within which there are presently four participants.
Another major facet of the bill is consumer protection. Because consumers' interactions with a company's products and services would be overseen by state regulators, there would be an added layer of protection that does not exist outside the program.
Various Nevada blockchain and cryptocurrency technology stakeholders testified in support of the bill at Wednesday's hearing, including but not limited to Blockchains LLC, Figure Technologies, and Filament. Matthew Digesti, vice president of government affairs and strategic initiatives at Blockchains LLC, said SB161 could help bring "phase two" of blockchain development to Nevada. (Disclosure: ETHNews is a division of Blockchains Management Inc., which is the parent company of Blockchains LLC.)
A few amendments to SB161 were suggested, two of which Senator Kieckhefer plans to incorporate into the bill's language. These two amendments would (1) move the administration of the experimentation program from the Office of the Attorney General to the Department of Business and Industry and (2) limit the scope of the bill so that only a few state divisions would be affected. A third amendment broached by a representative of the financial software company Intuit is currently being considered by the senator.
SB161 joins three other blockchain-friendly bills – SB162, SB163, and SB164 – which were introduced by Senator Kieckhefer earlier during Nevada's 2019 legislative session. However, the state legislature has also seen potentially problematic legislation, namely SB195, that myriad blockchain stakeholders in the state have publicly opposed.