Colorado (CO): Bitcoin and virtual-currency law

Summary

Colorado is one of the few states whose banking regulator says, in writing, that bitcoin transmission does not need a money-transmitter licence. The Division of Banking's December 2025 guidance reasons as follows:

• Virtual currency is not "money".
• Bitcoin is not a "payment instrument".
• Non-stablecoin crypto is not "stored value", because it represents no claim on an issuer.

Payment stablecoins are stored value, so selling or issuing them needs a licence, unless the federal GENIUS Act preempts that for federally qualified issuers. Kiosks therefore need no MTMA licence unless they sell stablecoins, but they must follow the kiosk act: limits, disclosures, receipts and a refund for some first-time transactions.

Colorado also has a 2019 securities exemption for "digital tokens", and since 2022 has accepted crypto for state taxes through PayPal, which converts it to dollars. No crypto bill was enacted in the 2026 session.

1. Money-transmitter licensing and virtual currency

• Statute: HB25-1201, the "Model Money Transmission Modernization Act", signed 2025-04-18 (signed act, saved; bill page). "Money transmission" means selling or issuing payment instruments, selling or issuing stored value, or receiving money for transmission (C.R.S. § 11-110-201(20)(a)).
• Effective date: the sources disagree.
• The Division of Banking says the MTMA took effect 2025-08-06, 91 days after the session adjourned on 2025-05-07.
• CSBS's chart says 2025-07-17.
• We follow the Division, which administers the act and explains its arithmetic.
• Division of Banking guidance, 2025-12-18 (PDF, saved):
• "A person who receives virtual currency for transmission from a person located in this state does not need a money transmitter license under this provision of the MTMA (C.R.S. § 11-110-201(20)(a)(III))," because virtual currency is not "money".
• Selling or issuing virtual currency is not selling a "payment instrument" (the guidance applies the ejusdem generis rule of interpretation).
• "Stored value" includes GENIUS Act "payment stablecoins", so selling them needs a licence. That requirement is preempted for federally qualified payment stablecoin issuers.
• Other cryptocurrencies "are not 'stored value'" because they do "not 'represent a claim against the issuer'".
• The guidance itself says it "does not amend the Act and is subject to change and/or withdrawal."
• History: HB18-1426 (2018) would have exempted virtual currency from the old Money Transmitters Act. It was "Lost" on Senate third reading (bill page). In 2018 the Division also issued earlier interim guidance on cryptocurrency, now superseded (the 2018 guidance itself was not retrieved).

2. Virtual-currency-specific statutes and guidance

3. Crypto ATM / kiosk law

SB25-079 (Sen. J. Rich, Sen. Roberts; Rep. Taggart, Rep. Jackson and others). Governor signed 2025-06-02. Effective 2026-01-01. Codified at C.R.S. § 11-112-101 et seq. (signed act; bill page):

• Written disclosure of terms before a transaction: the amount, fees and exchange rates, a warning that the transaction is irreversible, and more. The customer must acknowledge it.
• Receipts showing the transaction hash, addresses, fee, exchange rate, liability and refund policy.
• Daily limits: $2,000 for a new customer (one of fewer than 7 days) and $10,500 for an existing customer, per the signed act's § 11-112-103(6).
• Refunds: the operator must, at its own expense, let a customer cancel and get a full refund within 72 hours of notice. This applies only if (I) it was the customer's first transaction, (II) the funds went to a wallet or exchange outside the United States, and (III) within 60 days the customer contacted the operator and law enforcement and submitted proof of the fraud.
• No fee cap appears in the enacted text (our reading). This contradicts crypto.news's kiosk page, which lists Colorado among the fee-cap states (crypto.news).
• Discrepancy: the Division of Banking's own December 2025 guidance describes the existing-customer limit as "$5000". The signed act says $10,500. Legislative amendments may explain the difference. Treat $10,500 as the enacted figure and the $5,000 in the guidance as an apparent error.

4. Tax treatment

• Colorado income tax starts from federal taxable income, so bitcoin is taxed as property (we did not retrieve Department of Revenue guidance; general conformity is unverified for crypto specifically).
• Crypto payments of state tax were small:
• Sept–Dec 2022: 8 payments ($16,426).
• 2023: 22 payments ($23,241).
• 2024: 48 payments ($17,544).
• Governor Polis called the program "important symbolically to show that we are a crypto-forward state" (Colorado Newsline, above).

5. Notable enforcement

• No Colorado-specific crypto enforcement action was retrieved for this file (gap).
• Colorado is not among the seven lead states in the 2026-10-08 Coinme settlement; but Colorado is a participating state (Appendix A); its share of the $2.2M administrative penalty is $116,168.44 (Appendix B) Coinme consent order, App. A–B (completeness check, 2026-10-09); Appendix E splits Colorado's share between DORA ($15,152.41) and the Division of Banking ($101,016.03) (CSBS).

6. Bills

Pending: none. The next session begins in January 2027.

7. Contested and fringe claims

• "Crypto-forward state" versus results. Gov. Polis (D), a long-time bitcoin supporter, promotes Colorado as crypto-friendly. Colorado Newsline reports that crypto tax payments are "essentially nonexistent", 0.0005% of one year's income-tax revenue. It also notes that the state never actually receives crypto, because PayPal converts it. Critics quoted there list money laundering, environmental harm and volatility.
• Stablecoins treated more strictly than bitcoin. The Division's reasoning puts stablecoins inside licensing and leaves bitcoin outside it. Some may find that backwards for consumer protection; others call it legally precise. We found no court test.
• Kiosk refund limited to overseas destinations. The refund applies only when funds go to an offshore wallet or exchange. Consumer advocates elsewhere push for broader refunds (see AARP's state reviews); the industry argues refunds shift scammers' losses onto operators.

Saved sources (sources/states/co/)

See sources/states/co/INDEX.md.

Gaps

• Colorado Division of Securities and AG crypto enforcement history.
• The 2018 Division of Banking interim guidance.
• Department of Revenue crypto tax guidance.
• The legislature's bill-search page did not accept automated keyword queries, so 2025 bills other than the two above may be missing.