The proposed bill, known as the "Use of Convertible Virtual Currency Protection Act," aims to safeguard individuals' rights to use convertible virtual currency without interference from governmental entities. It explicitly prohibits these entities from restricting or impairing a covered user's ability to utilize convertible virtual currency for personal purposes, conduct transactions through self-hosted wallets, or use such currency as collateral for loans. The bill defines key terms such as "convertible virtual currency," "covered user," and "governmental entity," establishing a clear framework for its application.

Additionally, the bill imposes restrictions on governmental entities regarding taxation and reporting requirements. Specifically, it prohibits them from imposing taxes or requiring reporting on transactions involving less than $200 completed via convertible virtual currency. Furthermore, individuals who suffer losses due to violations of this act are granted the right to pursue civil action against the offending governmental entity, with the potential for courts to award triple damages to prevailing plaintiffs.