SB17 Alabama 2025 Session

Summary

Primary Sponsor

Merika ColemanSenator

Democrat

Session

2025 Regular Session

Title

Digital assets, prohibits the state from certain actions related to digital assets and exempts certain actions from classification as a security or money transfer

Summary

SB17 would limit state regulation of digital assets, protect mining, staking, and node activities from being treated as securities or money transmissions, and provide targeted tax relief for digital asset use.

What This Bill Does

If enacted, the state could not block or tax digital asset use or storage, or impose mining-specific zoning or noise rules. It would treat digital asset mining, staking, and running a node as not securities or money transmissions. It also creates tax rules, including no extra state taxes on digital asset payments and a capital gains exemption for small payments ($200 or less, CPI-adjusted), plus limits on local ordinances that burden mining, while allowing certain licenses for mining operations, effective October 1, 2025.

Who It Affects

• Digital asset users and wallet holders in Alabama who can use digital assets to buy goods/services and maintain self-hosted or hardware wallets without several state-imposed restrictions or taxes.
• Digital asset mining businesses, staking service providers, and node operators who would be exempt from securities and money transmission classifications and face fewer regulatory barriers, with some local licensing still possible.

Key Provisions

• Prohibits the state from restricting the use or storage of digital assets, imposing additional taxes on digital assets, or enacting zoning/noise restrictions specific to digital asset mining.
• Exempts digital asset mining, staking, and the operation of a node from classification as a security or money transmission.
• Defines key terms (blockchain, blockchain protocol, digital asset, digital asset mining, mining business, hardware wallet, node, self-hosted wallet, staking, staking as a service).
• Section 2 sets consumer protections: no additional state tax on using digital assets as payment and a capital gains tax exemption for transactions valued at $200 or less (adjusted annually by CPI).
• Section 3 prevents local ordinances from unduly burdening mining and allows mining in appropriate zones; residential mining is allowed under certain rules; data centers are treated similarly for purposes of these restrictions.
• Section 4 states mining, node operation, and related services are not money transmissions and that mining/staking as a service are not securities; individuals/entities involved in mining or staking are not liable for validating transactions.
• Section 6 allows municipalities to require business licenses for digital asset mining, and Section 7 sets an effective date of October 1, 2025.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Government Administration