On Tuesday, August 12, the lawmakers of Wisconsin introduced Senate Bill 386 (SB386) to require full Know Your Customer (KYC) checks on all transactions involving Bitcoin ATMs in the state.
The bill requires users to present a government-issued photo ID for every transaction, regardless of amount, and caps transactions at $1,000. Operators must also collect additional personal data to increase oversight.
The bill reflects growing state efforts to regulate cryptocurrency more strictly. Lawmakers pointed to risks like fraud and terrorism financing as some of the factors that necessitate stricter regulation.
Bitcoin ATM operators face higher compliance costs due to required identity verification systems, which may impact smaller businesses. Users will experience reduced anonymity and increased transaction hurdles, especially for those relying on Bitcoin ATMs for larger transactions.
Wisconsin is not the first state to regulate crypto, as New York, among others, launched the BitLicense program, which heralded a patchwork of state crypto regulations in the U.S. This patchwork of regulations makes it hard to comply with crypto companies that are active in the country.
If passed, SB386 could set a precedent, influencing future crypto laws at the state level. The move underscores the increasing pressure to treat digital assets like conventional finance, striking a balance between innovation and security.