A new digital asset tax signed into law in Illinois could have “severe consequences” for the industry in the state, according to some crypto advocates.

The “Digital Asset Tax Act” signed into law by Illinois Governor Pritzker as part of the state’s 2027 budget on Tuesday will institute a 0.2% tax on crypto activity in the state, including when assets are transferred or purchased. The tax is set to take effect on January 1, 2027.

“If enacted, the Digital Asset Privilege Tax Act would position Illinois as the only state in the country to punitively tax Illinois customers for simply receiving covered digital asset business activity,” the Crypto Council for Innovation (CCI) wrote in a letter addressed to Governor…