Rhode Island Bitcoin & Blockchain Legislation

Establishes a simplified exemption from state income tax for small-scale Bitcoin transactions up to $5,000/month or $20,000/year per taxpayer. Designed to reduce friction for everyday Bitcoin payments and encourage small business adoption.

Why We Strongly Support This

Under current law, every Bitcoin transaction — regardless of size — triggers capital gains reporting. A $5 coffee purchase requires calculating and reporting the gain or loss. This is unreasonable and prevents Bitcoin from functioning as everyday currency. JP Morgan Chase Institute research shows the median lifetime crypto investment is approximately $620 — this bill targets regular Rhode Islanders, not large investors.

Fiscal Impact $500K–$2.5M/yr 0.01%–0.04% of general revenue

Safeguard 1-Year Pilot Automatic sunset provision

Precedent First in U.S. RI would lead all 50 states

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Strong Support

H.7956 + S.2198 ↗

Studying Blockchain's Potential — Legislative Commission

In Committee

Sponsors: Sens. DiPalma, Gu, Burke, Urso, Paolino, Zurier Session: 2026 Builds on: 2025's H.5810 / S.0373

Creates a special legislative commission to study blockchain and cryptocurrency. Evaluates applicability for voting, land registries, public records, tax implications, revenue opportunities, and cost efficiencies. Interim report January 2027; final report January 2028.

Why We Strongly Support This

A study commission is the proper mechanism for informed policymaking. Wyoming launched a Blockchain Task Force in 2018, subsequently passed 50+ laws, and attracted major blockchain companies. Rhode Island should do its homework before the federal regulatory framework takes full effect. This commission brings together Commerce, DBR, academia, finance, and securities experts.

Scope Comprehensive Government, economic, regulatory

Timeline 2 Years Interim + final report with draft legislation

Model CO SB18-086 Colorado (2018), Mississippi HB1214 (2024)

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Strong Support

H.7957 + S.2196 ↗

Protecting Citizens' Private Keys

In Committee

Session: 2026 Builds on: 2025's H.5868 / S.0375

Prohibits compelling individuals to disclose their private cryptographic keys in legal proceedings related to digital assets or identities. Allows compelled disclosure only if a public key is unavailable or insufficient to access necessary information.

Why We Strongly Support This

A private key is not just access to one asset — it is a master key controlling assets, identities, and accounts simultaneously. Compelling someone to hand over a private key for a single transaction is like demanding the deed to someone's house when the court only needs their mailing address. This bill preserves all existing court and law enforcement authority while establishing that public keys should be used when sufficient.

Analogy House Deed vs. Address Courts need the address, not the deed

Preserves Full Court Authority Can still compel asset production

Model WY HB0086 Passed 31-0 Senate, 41-13 House (2023)

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Strong Support

H.7413 ↗

Rhode Island Economic Growth Blockchain Act

In Committee

Session: 2026 Builds on: 2025's H.5564

Establishes a regulatory sandbox and public-private partnerships to encourage blockchain innovation. Allows blockchain and digital asset companies to test innovative financial products with temporary regulatory exemptions. Creates Special Purpose Depository Institutions (SPDIs) requiring 100% liquid reserves.

Why We Strongly Support This

Only Wyoming and Nebraska currently have SPDIs. A regulatory sandbox attracts fintech companies as the U.S. regulatory environment turns favorable. Public-private partnerships could incentivize innovators to come to or stay in Rhode Island, helping diversify the state's economy and create high-quality jobs.

Key Feature SPDIs 100% liquid reserves required

Sandbox Regulatory Relief Temporary exemptions for innovation

Models WY + NE Wyoming HB74, Nebraska LB648

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Support w/ Amendments

H.7843 ↗

Rhode Island Decentralized Autonomous Organization Act

In Committee

Sponsor: Rep. Stephen M. Casey Introduced: February 27, 2026 Committee: House Corporations

Creates a legal framework for Decentralized Autonomous Organizations (DAOs) to operate as limited liability companies in Rhode Island. Provides for DAO formation, governance through smart contracts, limited liability protections, annual reporting to DBR, a regulatory sandbox for pilot projects, and capital formation through federally compliant private placements with full AML/KYC/FinCEN compliance.

Why We Support This With Amendments

The concept is sound and Rep. Casey's continued leadership on blockchain policy is commendable. Rhode Island would become the fifth state with a DAO framework, joining Wyoming, Vermont, Tennessee, and Utah. However, the bill as introduced has drafting gaps: no statutory definition of "DAO" or "smart contract," undefined relationship to existing LLC law (Ch. 16), vague regulatory sandbox parameters, no implementation runway for DBR, no provisions for smart contract failures, and no organizer identification requirements. These are fixable issues, and RIBPI has offered to assist in developing amendment language.

Key Feature DAO as LLC Legal clarity for blockchain organizations

Differentiator Regulatory Sandbox No other state DAO law includes one

Precedent 4 States WY (2021), VT (2018), TN (2022), UT (2023)

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Concerns

H.7955 + S.2648 ↗

Expanding Virtual Currency Kiosk Definitions

Senate Commerce · Heard Apr 14, 2026

Sponsors: Casimiro, Donovan, Spears, Potter, Alzate, Shallcross Smith Session: 2026 Amends: R.I. Gen. Laws § 19-14.3-1.1 (Chapter 19-14.3 / P.L. 2025, ch. 113)

Expands the definitions of virtual currency kiosk "operator" and "transaction" to capture app-to-counter and voucher-at-register business models that circumvent the Chapter 19-14.3 regulatory framework enacted last session (S 0016 Sub A / H 5121 Sub A). Targets entities that use digital applications to direct customers to pay in person through a clerk or intermediary rather than at a physical kiosk machine.

Why We Have Concerns

We support the goal of closing regulatory arbitrage — but the bill as drafted is dangerously overbroad. The phrase "facilitates or enables" could sweep in software developers, retail chains, payment processors, and non-custodial service providers who bear no resemblance to the bad actors this bill targets. Critical terms like "digital product or application," "clerk or other intermediary," and "facilitates or enables" are left undefined. Every newly captured entity inherits the full Chapter 19-14.3 compliance stack — six mandated compliance programs (§ 19-14.3-3.7), a full-time compliance officer and blockchain analytics (§ 19-14.3-3.11), extensive disclosures (§ 19-14.3-3.10), extended-hours live customer service (§ 19-14.3-3.13), and money-transmitter licensing (§ 19-14.3-3.9) — with zero implementation runway. The bill also collapses the custodial / non-custodial distinction, a departure from every major federal framework including the GENIUS Act.

Core Issue Overbroad Language "Facilitates or enables" sweeps too wide

Compliance Cost Low–Mid Six Figures / yr Full Chapter 19-14.3 stack inherited

Implementation Zero Days Effective upon passage — no transition

Our Primary Ask

Pass the Blockchain Study Commission (H.7956 / S.2198) before expanding the kiosk framework. Rhode Island is legislating before it has studied — the drafting problems in S.2648 are the predictable result. Convene industry, consumer advocates, law enforcement, and DBR to resolve the technical definitions this bill tries to answer in two paragraphs. Get the expert record built, then legislate from it.

Read Full Bill → Policy Brief →

Enacted Laws

Legislation signed into law. We support the intent of protecting consumers but have concerns with the current framework.

Concerns

S.0016A / H.5121A ↗

Virtual Currency Kiosk Regulation

Enacted June 2025

Signed: June 2025 Sponsors: Victoria Gu, Julie Casimiro

Creates a licensing and regulatory framework for virtual currency kiosk operators (Bitcoin ATMs) in Rhode Island. Establishes transaction limits, fee caps, mandatory on-screen fraud warnings, blockchain analytics requirements, compliance officer mandates, and refund obligations for scam victims. Rhode Island's first major crypto regulation.

Why We Have Concerns

The bill addresses a real problem — kiosk scams that disproportionately harm elderly Rhode Islanders — but its approach is structurally flawed. On-screen disclosure walls mirror failed gift card warning systems ($217M in gift card fraud losses in 2023 despite years of warnings). The entire cost of third-party criminal activity falls on kiosk operators, with cumulative compliance costs exceeding $200,000/year — manageable for national chains but fatal for small RI businesses. Most critically, the bill contains no provisions targeting actual scammers: no enhanced penalties, no law enforcement coordination, no funding for a crypto fraud task force. It regulates the tool while ignoring the criminal.

Disclosure Issue Passive Warnings Mirrors failed gift card prompts

Operator Burden $200K+/yr All fraud costs on operators, not criminals

Missing No Criminal Provisions Zero enforcement against scammers

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2025 Session — Historical Context

Previous session bills that laid the groundwork for the 2026 agenda.

H.5810 + S.0373 Engrossed (50%)

Studying Blockchain's Potential

Furthest-advancing bill of the 2025 session. Reintroduced in 2026 as H.7956 + S.2198.

H.5564 Died in Committee

Blockchain Economic Growth Act

Regulatory sandbox and SPDIs. Reintroduced in 2026 as H.7413.

H.5868 + S.0375 Died in Committee

Protecting Citizens' Private Keys

Reintroduced in 2026 as H.7957 + S.2196.

S.0451 Died in Chamber

Digital Asset Tax De Minimis

Study Commission Proposed

Tax Exemption Proposed

Consumer Protection Enacted

Resources

External tools and references for tracking blockchain policy

RI General Assembly

Official legislative website and bill texts

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Bitcoin Policy Institute

Research, analysis, and policy recommendations

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