25.0518.01000
Sixty-ninth
Legislative Assembly
of North Dakota
Introduced by
Representatives Toman, Christy, Hagert, Schauer, Warrey, D. Johnston
Senators Barta, Cory, Paulson
A BILL for an Act to create and enact a new section to chapter 11-33, a new section to chapter
13-09.1, a new section to chapter 40-47, a new chapter to title 51, and a new section to chapter
58-03 of the North Dakota Century Code, relating to blockchain technology, protection for digital
asset mining, and an exemption from a money transmitter license.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. A new section to chapter 11-33 of the North Dakota Century Code is created
and enacted as follows:
Protection for digital asset mining.
1.An individual may not be prohibited, restricted, or otherwise prevented from
participating in digital asset mining in an area zoned for residential use if the individual
engaging in digital asset mining complies with all county noise ordinances.
2.In an area zoned for commercial use, a county may not:
a.Place a limit on sound decibels generated from a digital asset mining business
which is more restrictive than limits imposed for sound pollution in that area
generally.
b.Place restrictions on a digital asset mining business which do not apply to other
businesses in that area.
c.Change the zoning of a digital asset mining business without providing notice and
an opportunity for comment.
3.A digital asset mining business may appeal a change in zoning to the district court.
4.For purposes of this section:
a."Digital asset mining" means using computer hardware and software specifically
designed or used for the purpose of validating data and securing a blockchain
network.
Page No. 1 25.0518.01000
HOUSE BILL NO. 1239
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 Sixty-ninth
Legislative Assembly
b."Digital asset mining business" means an individual or company operating a
digital asset mining facility that cumulatively draws more than one megawatt of
power in the state.
SECTION 2. A new section to chapter 13-09.1 of the North Dakota Century Code is created
and enacted as follows:
Exemption from money transmitter license.
1.An individual or business is exempt from a money transmitter license under this
chapter if the individual or business:
a.Operates a node or a series of nodes on a blockchain protocol.
b.Engages in digital asset mining.
c.Develops software on a blockchain protocol, including if the software effectuates
the exchange of one digital asset for another digital asset.
2.A business or decentralized protocol that effectuates the exchange of one digital asset
for another digital asset and does not exchange those digital assets for legal tender or
bank deposits is exempt from a money transmitter license under this chapter.
3.For purposes of this section:
a."Blockchain protocol" means any executable software deployed to a blockchain,
including an additional standardized set of rules that use a previously existing
blockchain as a base and which facilitate the transfer of data and electronic
records and allow that data to be broadcast to nodes.
b."Decentralized protocol" means a blockchain protocol software system governed
by a set of predefined rules that execute autonomously without human
intervention and which can be altered by some predetermined mechanism.
c."Digital asset" means virtual currency, cryptocurrencies, natively electronic
assets, including stablecoins and nonfungible tokens, and other digital-only
assets that confer economic, proprietary, or access rights or powers.
d."Digital asset mining" means using computer hardware and software specifically
designed or used for the purpose of validating data and securing a blockchain
network.
e.(1)"Node" means a computational device that:
Page No. 2 25.0518.01000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 Sixty-ninth
Legislative Assembly
(a)Communicates with other devices or participants on a blockchain to
maintain consensus and integrity of that blockchain;
(b)Creates and validates transaction blocks; or
(c)Contains and updates a copy of a blockchain.
(2)A node does not exercise discretion over transactions initiated by the end
user of the blockchain protocol.
SECTION 3. A new section to chapter 40-47 of the North Dakota Century Code is created
and enacted as follows:
Protection for digital asset mining.
1.An individual may not be prohibited, restricted, or otherwise prevented from
participating in digital asset mining in an area zoned for residential use if the individual
engaging in digital asset mining complies with all city noise ordinances.
2.In an area zoned for commercial use, a city may not:
a.Place a limit on sound decibels generated from a digital asset mining business
which is more restrictive than limits imposed for sound pollution in that area
generally.
b.Place restrictions on a digital asset mining business which do not apply to other
businesses in that area.
c.Change the zoning of a digital asset mining business without providing notice and
an opportunity for comment.
3.A digital asset mining business may appeal a change in zoning to the district court.
4.For purposes of this section:
a."Digital asset mining" means using computer hardware and software specifically
designed or used for the purpose of validating data and securing a blockchain
network.
b."Digital asset mining business" means an individual or company operating a
digital asset mining facility that cumulatively draws more than one megawatt of
power in the state.
SECTION 4. A new chapter to title 51 of the North Dakota Century Code is created and
enacted as follows:
Page No. 3 25.0518.01000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 Sixty-ninth
Legislative Assembly
Definitions.
In this chapter, unless the context of use clearly requires otherwise:
1."Blockchain protocol" means any executable software deployed to a blockchain,
including an additional standardized set of rules that use a previously existing
blockchain as a base and which facilitate the transfer of data and electronic records
and allow that data to be broadcast to nodes.
2."Central bank digital currency" means a digital currency, a digital medium of exchange,
or a digital monetary unit of account issued by the United States federal reserve
system or a federal agency which is made directly available to institutions or
consumers by those entities, or which is processed or validated directly by those
entities. The term does not include a digital asset backed by legal tender or
government treasuries and issued by a private entity.
3."Digital asset" means virtual currency, cryptocurrencies, natively electronic assets,
including stablecoins and nonfungible tokens, and other digital-only assets that confer
economic, proprietary, or access rights or powers.
4."Governing authority" means any state agency or board, commission, or department
or any political subdivision.
5."Hardware wallet" means a physical device that is not continuously connected to the
internet and allows an individual to secure and transfer digital assets. The term
includes a physical device under which the owner of digital assets retains independent
control over the digital assets.
6.a."Node" means a computational device that:
(1)Communicates with other devices or participants on a blockchain to
maintain consensus and integrity of that blockchain;
(2)Creates and validates transaction blocks; or
(3)Contains and updates a copy of a blockchain.
b.A node does not exercise discretion over transactions initiated by the end user of
the blockchain protocol.
7."Self-hosted wallet" means a digital interface used to:
a.Secure and transfer digital assets; and
Page No. 4 25.0518.01000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 Sixty-ninth
Legislative Assembly
b.Retain independent control over the secured digital assets by the owner of the
digital asset.
8."Staking" means committing digital assets to a blockchain network to participate in the
blockchain network's operations by validating transactions and securing the network.
Prohibitions on use and testing of central bank digital currency.
1.A governing authority may not accept or require a payment using central bank digital
currency.
2.A governing authority may not participate in any test of central bank digital currency by
the board of governors of the federal reserve system or any branch or agency of the
federal government.
Permitted uses of digital assets.
A governing authority may not prohibit, restrict, or otherwise impair the ability of an
individual or business to:
1.Accept digital assets as a method of payment for legal goods and services.
2.Take custody of digital assets using a self-hosted wallet or hardware wallet.
Access to blockchain protocols and transfer of digital assets.
A person may:
1.Operate a node for the purpose of connecting to a blockchain protocol and
participating in the blockchain protocol's operations.
2.Develop software on a blockchain protocol.
3.Transfer digital assets to another person using a blockchain protocol.
4.Participate in staking on a blockchain protocol.
SECTION 5. A new section to chapter 58-03 of the North Dakota Century Code is created
and enacted as follows:
Protection for digital asset mining.
1.An individual may not be prohibited, restricted, or otherwise prevented from
participating in digital asset mining in an area zoned for residential use if the individual
engaging in digital asset mining complies with all township noise ordinances.
2.In an area zoned for commercial use, a township may not:
Page No. 5 25.0518.01000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29 Sixty-ninth
Legislative Assembly
a.Place a limit on sound decibels generated from a digital asset mining business
which is more restrictive than limits imposed for sound pollution in that area
generally.
b.Place restrictions on a digital asset mining business which do not apply to other
businesses in that area.
c.Change the zoning of a digital asset mining business without providing notice and
an opportunity for comment.
3.A digital asset mining business may appeal a change in zoning to the district court.
4.For purposes of this section:
a."Digital asset mining" means using computer hardware and software specifically
designed or used for the purpose of validating data and securing a blockchain
network.
b."Digital asset mining business" means an individual or company operating a
digital asset mining facility that cumulatively draws more than one megawatt of
power in the state.
Page No. 6 25.0518.01000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15