The Illinois Department of Financial and Professional Regulation has published a guidance that outlines its policy with regard to digital currencies such as bitcoin.

Importantly, the guidance expresses the department's interpretation of Illinois’ Transmitters of Money Act (TOMA) and its application to various activities involving digital currencies. It lists the activities that qualify as money transmission as well as activities that don’t.

“A person or entity engaged in the transmission of solely digital currencies, as defined, would not be required to obtain a TOMA license. However, should transmission of digital currencies involve money in a transaction, that transaction may be considered money transmission depending on how the transaction is organized. Any person or entity engaging in a transaction involving both digital currencies and money should request a determination from the Department on whether or not such activity will require a TOMA license”, according to the guidance.

Furthermore, the department approved the use of cryptocurrencies as “permissible investments”, noting that digital currency companies have to bear extra burden due to capital requirements denominated in fiat currencies.

"The Department understands dollar-denominated capital reserve requirements impose added burdens on digital currency companies and therefore will consider digital currency reserves as a form of permissible investment”, it added.

Also, digital currency entities that act only as a payment processor that accepts and transfers payments in connection with facilitating a purchase via an agreement with the seller of goods or services, are not required to obtain a money license transmitters with the department.

The complete report can be found here.