California Implements AB 129, Legalizes Bitcoin and Other Digital Currencies
California is the first state in the union to legalize the use of bitcoin and other digital currencies. Jerry Brown, governor of California, was responsible for the implementation of the bill on January 1, 2015.
AB 129, the bill that repeals Section 107 of the California Corporations Code, pushes for the use of reward points, gift certificates, and virtual currencies as viable forms of payments in addition to the US dollar.
Roger Dickinson, chair of the California state Assembly Committee on Banking and Finance, said, “This bill makes clarifying changes to current law to ensure that various forms of alternative currency such as digital currency, points, coupons, or other objects of monetary value do not violate the law when those methods are used for the purchase of goods and services or the transmission of payments.”
Analysts say the move to legalize virtual currencies is a step in the right direction for the industry. The rise of new laws and regulations can help stabilize bitcoin and allow it to move toward mainstream markets.
Over 40 percent of bitcoin-related businesses are in California, including Coinbase and ChangeTip. Such companies power the bitcoin economy on a global scale, supporting alternative payment methods for merchants and leading establishments.
For the rest of the world, the implementation of AB 129 is just a small piece of the overwhelmingly complex puzzle. Convincing other governments and lawmakers to follow suit is the next step in solidifying acceptance.
While many acknowledge the potential of bitcoin in a technology-driven future, there are also individuals who are strongly against the use of virtual currencies.
Bob Lyddon, general secretary of IBOS, mentioned, “The EBA and the financial action taskforce have already said this [digital currency] is really dangerous. If it isn’t a financial market infrastructure, it must be a payment service provider. It needs to be registered to be able to take in customer money.”