An Act providing for collateral requirements for virtual currency lenders and for segregation of funds; and imposing penalties.

HB 883, the Digital Asset Regulation Act, requires virtual currency lenders operating in Pennsylvania to hold collateral equal to 100% of the value of virtual currency lent (using cash or cash equivalents) and to keep client funds separate from the lender’s own money. Lenders must notify the Department of Banking and Securities 90 days before operating in Pennsylvania and obtain written agreements with clients about collateral. Failure to comply results in fines starting at $5,000 for the first violation, increasing to $20,000 for third or subsequent violations, with potential business bans after three violations. The bill directly affects virtual currency lenders and protects clients by ensuring funds are secured and segregated.