Bitcoin and digital currency gaining ground
California Governor Jerry Brown has signed into law bill AB 129, legalizing the use of Bitcoin, Dogecoin, and other popular digital currencies. This legalization comes on the heels of the U.S. Securities and Exchange Commission as well as the Internal Revenue Service considering their position on the currency, mostly from a leery point of view.
This bill repeals Section 107 of California’s corporations Code, which made it illegal for companies or individuals to issue money other than U.S. dollars. The new law makes it clear that digital currencies, coupons, and loyalty points are all legal forms of payment to buy goods and services in the state.
Assemblyman Roger Dickinson, author of the bill, stated, “In an era of evolving payment methods, from Amazon Coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives. This bill is intended to fine-tune current law to address Californians’ payment habits in the mobile and digital fields.”
Currently, the IRS classifies Bitcoin as property, making it difficult to trade for goods, and currently the government requires that gains made by anyone using digital currency must be tracked, reported, and taxes must be paid for them.
As one state opens the floodgates, the feds continue to debate their stance. Regarding federal regulation, Lani Rosales, COO here at The American Genius recently wrote, “Federal regulation could be a double-edged sword, as purists that engaged in Bitcoin trading did so for their perceived freedom, while the attention of being regulated could actually attract more traders, making the virtual currency more mainstream.”
“There are advantages and disadvantages of federal regulation,” Rosales adds, “and it remains to be seen where the chips will fall, but we believe federal regulation will destroy the very fabric of Bitcoin and likely cause early adopters to jump ship.”