This tax will trigger capital flight by making Illinois prohibitively expensive and risky for digital asset activity.
Other U.S. states and jurisdictions (e.g., Texas, Florida, or offshore) offer zero or far lower transaction taxes. Rational actors (traders, funds, protocols, and companies) will simply route activity, relocate wallets, or move headquarters elsewhere to avoid the drag.
Exchanges, custodians, and wallet providers operating in or serving Illinois will face compliance costs, reduced margins, and customer churn. Many will exit or block Illinois users, shrinking local liquidity and making the ecosystem even less viable.
Lower liquidity β wider spreads/higher slippage β even more incentive to leave β further erosion of Illinoisβ digital asset market.