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Legislation Addressing Alternative Currencies like Bitcoin Passes the Assembly

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Sacramento—Today, Assemblymember Roger Dickinson’s (D-Sacramento) bill AB 129 addressing alternative currencies passed the Assembly.  Modern methods of payment have expanded beyond cash or credit card.  AB 129 repeals an outdated restriction on the use of "anything but the lawful money of the United States."  The literal meaning of the restriction indicates that anyone using alternative currency is in violation of the law.  However, people commonly use digital currency, community currency, and reward points without penalty.

“In an era of evolving payment methods, from Amazon Coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives,” Dickinson said. “This bill is intended to fine-tune current law to address Californians’ payment habits in the mobile and digital fields.”

Bitcoin, a growing digital currency, has gained recent media attention as businesses have expanded to accept Bitcoins for payment. Long before the introduction of digital currencies, various businesses created point models that allow consumers to use points to pay for goods or services. Many communities have created "community currencies" that are created by members of a community and the merchants who agree to accept the alternative currency. These "community currencies" are created for a variety of reasons, some of which include encouraging consumers to shop at small businesses within the community or increasing neighborhood cohesiveness.

The bill will be heard next by the full Senate.

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