The vote between the California Senate Banking and Financial Institutions Committee resulted on 4th June, Wednesday, in recognition of digital currency including bitcoin, points and coupons, among other US dollar alternatives, as lawful money, according to CoinDesk.
The 7-1 vote by the committee means the bill authored by assembly member Roger Dickinson, known as AB-129 (Assembly Bill 129) will be moved to Senate for further debate.
Then if approved, the bill will be sent to Governor Jerry Brown for his approval signature. Then if governor approves, the law would legalize the cryptocurrencies in California, which would be a big plus for bitcoin related business, e.g. Coinbase.
Moreover, it would cancel the current state law titled the California Corporations Code Section 107:
“No corporation, flexible purpose corporation, association or individual shall issue or put in circulation, as money, anything but the lawful money of the United States.”
AB-129 was sent to the Senate committee in February after getting approved in the Assembly.
The bill is on its way to the Senate and bitcoin is now closer to becoming known among lawful money in the US.
The new version of the bill revised by the Senate in May, requires a repeal from the previous Section 107 of the Corporations Code, which prevents both businesses and people from creating unlawful forms of money.
Before the bill altered Section 107 to identify bitcoin as “lawful money”, with a specification stating that individuals or companies were not required to accept digital currencies as a form of payment. There is still a free use of bitcoin in the state, but the broader repeal means a bigger variety of digital currencies will appear.
Mr. Dickinson said the main purpose of the bill when it was first introduced to the Senate:
“We’re not trying to deter or advance the development of alternative currencies. We’re trying to say that to the extent that alternative currencies are developed and in use, we will consider that to be a legally acceptable activity in California.”
At the moment, it is believed that changes are needed to the existing law. The changes will assure that various forms of alternative currency do not violate the law when used by customers, whether it is payment for goods or services or the transmission of payments.
Mr. Dickinson mentioned that among other cryptocurrencies, bitcoin is the better alternative to money:
“It wasn’t so much setting out to look at the issue of alternative currency, it was more evolutionary, leading into the breadth of the subject matter that suggested to us you couldn’t ignore alternative currencies.”
Even though the bill was approved, digital currencies are not designated as legal tender to settle debts or obligations, rather as payment for buying and selling goods and services.