California Considers Bill Setting Virtual Currency Guidelines
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A bill has been introduced in the California Assembly that would set rules around digital currencies like Bitcoin.
Assemblyman Matt Dababneh, D-Encino, proposed AB 1326, a bill that provides guidelines for any individual or business that wants to start using virtual currency.
AB 1326 says that any applicant who wants to pursue using virtual currency needs to pay $5,000 to the Commission of Business Oversight commissioner and provide basic information about her business and plans for virtual currency.
Furthermore, the bill would require each licensee to maintain enough capital in case the commissioner discovers a problem with their businesses operations to preserve consumer protection. To satisfy this capital requirement, applicants need to invest an aggregate amount equal to the value of the virtual currency that the licensee has on deposit for its customers in only specified investments.
Currently, California's Money Transmission Act prohibits someone from doing money transmission business unless they are licensed by the Commission of Business Oversight or are exempt from the licensing requirement. This exemption list includes the U.S. Postal Service, government agencies, commercial or industrial banks insured by the Federal Deposit Insurance Corp., and a merchant or consumer that utilizes virtual currency solely for the purchase or sale of goods.
According to the California legislature, "virtual currency" means any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology. These units can have a centralized repository or administrator, are decentralized without an administrator, or could be created or obtained by computing or manufacturing effort.