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Wisconsin Legislature: SB535: Bill Text
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SB535: Bill Text
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2025 - 2026 LEGISLATURE
LRB-4831/1
ARG:cdc
2025 SENATE BILL 535
October 17, 2025 - Introduced by Senator
Testin
, cosponsored by Representatives
Neylon
,
Gustafson
,
Gundrum
,
Knodl
,
Kreibich
,
Krug
and
Tranel
. Referred to Committee on Utilities, Technology and Tourism.
SB535,1,2
1
An Act
to create
66.0443, 138.015, 217.03 (1) (p) and 551.202 (28) of the
2
statutes;
relating to:
the regulation of digital assets.
Analysis by the Legislative Reference Bureau
This bill limits the ability of state agencies and cities, villages, towns, and counties (political subdivisions) to regulate digital assets, including cryptocurrency, and specifies digital asset–related activities in which a person may engage.
Under the bill, neither a state agency nor a political subdivision may prohibit or restrict a person in accepting digital assets as a method of payment for legal goods and services or in taking custody of digital assets using a self-hosted wallet or hardware wallet. The bill also specifies that a person in this state 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 utilizing a blockchain protocol; and 4) participate in staking on a blockchain protocol. The bill includes various definitions relating to these provisions.
Under current law, the Department of Financial Institutions regulates money transmitters. With exceptions, a person may not engage in the business of money transmission unless the person is licensed by DFI. “Money transmission” means selling or issuing payment instruments or stored value, such as checks, money orders, or prepaid cards, to a person located in this state or receiving money for transmission from a person located in this state. “Money” is not defined to include virtual currency such as cryptocurrency.
This bill creates an additional exception to the regulation of money transmitters to exclude a person engaged in 1) operating a node or a series of nodes on a blockchain; 2) effectuating the exchange of one digital asset for another digital asset if there is no exchange of digital assets for legal tender or bank deposits; 3) developing software on a blockchain, even if the software effectuates the exchange of one digital asset for another digital asset; or 4) digital asset mining or staking or engaging in a digital asset mining business.
Under current law, a person may not offer or sell any security in this state unless the security is registered with DFI, the security or transaction is exempt from registration, or the security is a federal covered security.
This bill creates an additional transaction exemption related to digital asset staking. The bill exempts a person from various securities-related requirements for providing technical solutions by third-party service providers to allow token owners to earn rewards through staking, not including returns other than rewards paid by the network.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB535,1
1
Section
1
.
66.0443 of the statutes is created to read:
SB535,2,3
2
66.0443
Permitted uses of digital assets.
(1)
Definitions.
In this
3
section:
SB535,2,4
4
(a) “Digital asset” has the meaning given in s. 138.015 (1) (c).
SB535,2,5
5
(b) “Hardware wallet” has the meaning given in s. 138.015 (1) (d).
SB535,2,6
6
(c) “Political subdivision” means a city, village, town, or county.
SB535,2,7
7
(d) “Self-hosted wallet” has the meaning given in s. 138.015 (1) (f).
SB535,2,10
8
(2)
Permitted uses of digital assets.
A political subdivision may not
9
prohibit, restrict, or otherwise impair the ability of a person to do any of the
10
following:
SB535,2,11
11
(a) Accept digital assets as a method of payment for legal goods and services.
SB535,2,13
12
(b) Take custody of digital assets using a self-hosted wallet or hardware
13
wallet.
SB535,2
14
Section
2
.
138.015 of the statutes is created to read:
SB535,3,1
1
138.015
Digital assets.
(1)
Definitions.
In this section:
SB535,3,2
2
(a) “Blockchain” means any technology where data is all of the following:
SB535,3,4
3
1. Shared across a network to create a public ledger of verified transactions or
4
information among network participants.
SB535,3,6
5
2. Linked using cryptography to maintain the integrity of the public ledger
6
and to execute other functions.
SB535,3,9
7
3. Distributed among network participants in an automated fashion to
8
concurrently update network participants on the state of the public ledger and any
9
other functions.
SB535,3,10
10
4. Composed of source code that is publicly available.
SB535,3,12
11
(b) “Blockchain protocol” means any executable software that is all of the
12
following:
SB535,3,16
13
1. Deployed to a blockchain that facilitates the transfer of data and electronic
14
records and allows that data to be broadcast to nodes, which blockchain may include
15
an additional standardized set of rules that use a previously existing blockchain as
16
a base.
SB535,3,18
17
2. Governed by a set of predefined rules that execute autonomously without
18
human intervention but which can be altered by some predetermined mechanism.
SB535,3,20
19
(c) “Digital asset" means any digital representation of value that is recorded
20
on a cryptographically-secured distributed ledger or other similar technology.
SB535,3,24
21
(d) “Hardware wallet" means a physical device that is not continuously
22
connected to the Internet and that allows an individual to secure and transfer
23
digital assets. “Hardware wallet" includes a physical device under which the owner
24
of a digital asset retains independent control over the digital asset.
SB535,4,3
1
(e) “Node" means software run on a computer that does any of the following
2
but that does not exercise discretion over transactions initiated by an end user of a
3
blockchain protocol:
SB535,4,5
4
1. Communicates with other devices or participants on a blockchain to
5
maintain consensus and integrity of that blockchain.
SB535,4,6
6
2. Creates and validates blocks of transactions.
SB535,4,7
7
3. Contains and updates a copy of a blockchain.
SB535,4,10
8
(f) “Self-hosted wallet" means a digital interface that is used to secure and
9
transfer digital assets and to retain independent control over the secured digital
10
assets by the owner of the digital assets.
SB535,4,14
11
(g) “Staking" means the act of committing or locking a digital asset to support
12
the security and operations of a blockchain protocol that uses a proof-of-stake
13
consensus mechanism by either operating a validator node or delegating the digital
14
asset to a validator.
SB535,4,15
15
(h) “State agency” has the meaning given in s. 16.004 (15) (a).
SB535,4,18
16
(i) “Validate” means the process by which a blockchain protocol, through its
17
consensus mechanism, confirms the authenticity and accuracy of transactions or
18
other data entries which are then recorded on a blockchain protocol.
SB535,4,20
19
(2)
Permitted uses of digital assets.
(a) A state agency may not prohibit,
20
restrict, or otherwise impair the ability of a person to do any of the following:
SB535,4,21
21
1. Accept digital assets as a method of payment for legal goods and services.
SB535,4,22
22
2. Take custody of digital assets using a self-hosted wallet or hardware wallet.
SB535,4,23
23
(b) A person in this state may do any of the following:
SB535,5,2
1
1. Operate a node for the purpose of connecting to a blockchain protocol and
2
participating in the blockchain protocol’s operations.
SB535,5,3
3
2. Develop software on a blockchain protocol.
SB535,5,4
4
3. Transfer digital assets to another person utilizing a blockchain protocol.
SB535,5,5
5
4. Participate in staking on a blockchain protocol.
SB535,3
6
Section
3
.
217.03 (1) (p) of the statutes is created to read:
SB535,5,7
7
217.03
(1)
(p) 1. In this paragraph:
SB535,5,8
8
a. “Blockchain” has the meaning given in s. 138.015 (1) (a).
SB535,5,11
9
b. “Decentralized protocol” means a blockchain protocol software system
10
governed by a set of predefined rules that execute autonomously without human
11
intervention but which can be altered by some predetermined mechanism.
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