California passes bill for alternative currencies

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California passes bill for alternative currencies

Revised currency law supports Bitcoin.

California has signed into law a bill that clears away possible state-level obstacles to alternative currencies such as Bitcoin.

Roger Dickinson from the Democractic Assembly authored the bill and said it reflects the popularity of forms of payment already in use in California like Bitcoin. He noted that even rewards points from businesses, such as Starbucks, could technically be considered illegal without an update to currency law. 

The legislation repeals what backers said was an outdated California law prohibiting commerce using anything but US currency.

California lawmakers approved the measure last week, just days after the failed Tokyo-based Bitcoin exchange Mt. Gox received court approval to begin bankruptcy proceedings in the United States as it awaits approval of a settlement with US customers and a sale of its business.

Mt. Gox was once the world's leading exchange for trading the digital currency, but shut its website earlier this year after losing funds in a hacking attack. 

An analysis of the bill prepared for lawmakers mentions "community currencies", which are created by members of a local area along with participating merchants and are sometimes designed as a protest of US monetary policies, among the forms of alternative payment methods now in use in certain parts of the United States.

The Reserve Bank of Australia has warned that the adoption of crypto currencies like Bitcoin could pose a threat to Government’s ability to set monetary policy. 

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