A New Jersey state legislator has introduced a bill that would require digital assets sold to institutional investors to be considered securities in the state.

This bill was introduced by Democratic Assemblymember Herb Conaway, Jr. His initiative would complement the New Jersey Uniform Securities Act, which currently does not mention cryptocurrencies. The bill only applies to institutional investors, which are defined as “a company or organization that invests money on behalf of other people.” The document also states that the State Securities Bureau may designate stablecoins as virtual currencies. The bill would only apply to transactions governed by New Jersey law.

The document was referred to the Assembly Financial Institutions and Insurance Committee, which is expected to review it and hold public hearings. If the committee approves the bill, it will be sent to the full Assembly for a vote.

Cryptocurrencies have yet to receive specific regulatory status at the federal level in the United States. In lawsuits against cryptocurrency companies Kraken, Coinbase, Binance and Bittrex, the US Securities and Exchange Commission (SEC) named crypto assets ADA, AXS, ALGO, ATOM, BNB, BUSD, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, NEXO, OMG, SAND, SOL, TKN and VGX securities. SEC Chairman Gary Gensler believes that most cryptocurrencies, with the exception of Bitcoin, fall into the category of securities.

According to the recent SEC-Ripple court ruling, XRP coin sold on the secondary market is not a security, but when initially sold to institutional investors, it is considered an investment contract. The SEC recently requested that the court declare the crypto assets sold by Terraform Labs to be unregistered securities.