The state of Ohio is taking a significant step toward embracing digital innovation with the introduction of House Bill 116, commonly referred to as the "Blockchain Foundational Act." This proposed legislation seeks to create a clear and supportive regulatory environment for digital assets by preventing the imposition of additional taxes on transactions involving cryptocurrency.
Introduced on February 24 by Representative Steve Demetriou, the bill aims to amend existing state laws to ensure that digital assets are treated fairly and consistently—without being burdened by tax requirements beyond those applied to traditional fiat currency transactions.
Defining Digital Assets Under Ohio Law
At the core of the Blockchain Foundational Act is a precise legal definition of "digital asset," which includes cryptocurrencies, stablecoins, and non-fungible tokens (NFTs). While standard state taxes—such as sales tax or use tax—would still apply when purchasing goods or services with crypto, the bill explicitly prohibits the creation of new, targeted taxes solely based on the use of digital currencies.
This clarification is crucial for both consumers and businesses navigating the evolving financial landscape. By ensuring crypto users aren’t penalized through redundant taxation, Ohio positions itself as a forward-thinking state open to blockchain innovation.
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Protecting Consumer Rights in Crypto Adoption
One of the most impactful aspects of the bill is its protection of individual rights regarding cryptocurrency usage. Under the proposed law, no state agency or political subdivision can prohibit someone from accepting digital assets as payment for goods or services. This empowers merchants and freelancers to adopt crypto voluntarily while reinforcing financial freedom.
Moreover, Ohio residents would retain full control over their digital assets through self-custody options such as hardware wallets or personal software solutions. The legislation affirms that individuals have the right to manage, store, and secure their own crypto without mandatory reliance on third-party custodians.
Additionally, the act supports active participation in blockchain networks by explicitly allowing activities like staking and mining. These processes are vital for network security and decentralization in many blockchain ecosystems, and their legal recognition strengthens Ohio’s appeal to tech innovators and investors.
Clear Rules for Crypto Mining Operations
The bill addresses long-standing concerns about the legality and zoning restrictions surrounding cryptocurrency mining. It clarifies that mining operations do not require a money transmitter license under current Ohio law—a major win for regulatory clarity.
Residential mining is permitted, provided individuals comply with local zoning ordinances. Meanwhile, industrial zones are explicitly authorized for commercial mining ventures. Importantly, these businesses would be protected from arbitrary or discriminatory changes in zoning regulations, ensuring long-term operational stability.
This balanced approach acknowledges both community planning needs and the economic potential of blockchain infrastructure projects, fostering responsible growth in the sector.
Evaluating Crypto Investments for Public Funds
Beyond individual rights and business operations, the legislation also directs the Ohio Public Employees Retirement System (OPERS) to evaluate the feasibility of investing in cryptocurrency-based exchange-traded funds (ETFs). Within one year of enactment, OPERS must submit a comprehensive report to the General Assembly outlining the potential risks and rewards associated with such investments.
This mandate reflects growing institutional interest in digital assets and encourages evidence-based decision-making at the policy level. As more states explore public crypto holdings—from treasury reserves to pension fund allocations—Ohio’s move could set a precedent for cautious yet progressive fiscal modernization.
Ohio’s Broader Push for Blockchain Leadership
Ohio lawmakers have demonstrated consistent momentum in advancing blockchain-friendly policies. In recent years, multiple bills have been introduced aimed at integrating digital assets into state operations.
For instance, previous proposals sought to allow taxpayers to pay state fees and taxes using cryptocurrency. Another notable initiative involves establishing a strategic Bitcoin reserve for the state—a concept gaining traction across several U.S. states seeking portfolio diversification and inflation hedging.
In February, State Senator Sandra O’Brien introduced a bill proposing the creation of an “Ohio Bitcoin Reserve Fund,” which would hold Bitcoin for a minimum of five years. Such efforts underscore a broader trend: state governments recognizing digital assets not just as speculative tools, but as legitimate components of modern financial strategy.
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Frequently Asked Questions (FAQ)
Q: Does this bill eliminate all taxes on crypto transactions in Ohio?
A: No. The bill does not eliminate standard taxes like sales tax or use tax when buying goods with crypto. Instead, it prevents new or additional taxes from being imposed solely because a transaction uses digital assets.
Q: Can businesses in Ohio refuse crypto payments even if this law passes?
A: Yes. The law protects the right to accept crypto as payment but does not require any business to do so. Acceptance remains voluntary.
Q: Will Ohio start accepting crypto for tax payments under this bill?
A: Not directly. While this specific bill doesn’t mandate crypto tax payments, other separate proposals have been introduced with that goal. None have passed yet.
Q: Is crypto mining legal in all parts of Ohio?
A: Residential mining is allowed if local zoning rules are followed. Commercial mining is explicitly permitted in industrial zones and protected from unfair regulatory changes.
Q: Could Ohio’s public pension funds invest in Bitcoin?
A: Not immediately. The bill requires the retirement system to study the possibility of investing in crypto ETFs and report back within a year. Actual investment decisions would require further legislative action.
Q: How does this affect NFT owners in Ohio?
A: NFTs are included under the definition of digital assets. Owners retain full rights to store, transfer, and use NFTs without facing new taxes or prohibitions simply due to their digital nature.
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As more states consider similar frameworks, Ohio’s approach could serve as a model for balanced, innovation-friendly regulation—one that supports economic growth without compromising consumer protection or fiscal responsibility.