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California May Lose Title as ‘Bitcoin-Friendly State’

California

California got the nod when it became a Bitcoin-friendly state after its local government gave digital currency use the green light. However, it appears as if Bitcoin businesses within the state may need to shell out $5,000 to legally operate.

Under AB-1326, a new bill penned by Assemblymember Matt Dababneh who currently heads the state’s Banking and Finance Committee, all businesses that run on digital currencies like Bitcoin must be licensed by the Department of Business Oversight. Otherwise, they will not be allowed to operate, thereby tagging them as illegal businesses.

California State AssemblyThis bill requires operators to apply for a license and pay its non-refundable fee for registration along with other requirements. However, businesses that have previously acquired a license are not covered by the proposed bill anymore.

Proposed bill arises from security concerns

According to reports, the rationale behind the new bill is to ensure the locals’ security against possible threats or unfortunate incidents similar to the Mt. Gox fiasco.

The future of AB-1326 may be revealed in the next few weeks. If the response is in favor of it, the California state will be among the few places where Bitcoin in the business setting is regulated—something the DBO is not too keen on doing.

Will AB-1326 hamper Bitcoin betting too?

Apart from the possible confusion or inconvenience bitcoiners may experience with the passing of the bill, the state of the Bitcoin casino market in California may become even vaguer.

At present, online gambling within the state is illegal, and the bills pushing for its legalization are still pending. Moreover, Bitcoin is regarded as an acceptable currency, but whether or not it is also covered by the gambling laws remains uncertain.

What is clear, though, is that Bitcoin per se is not yet regulated, giving the digital currency a pass at being used as wagers.

Regulation will make the state not so Bitcoin-friendly anymore

In the event the bill receives the approval, this may mark the beginning of an even more controlled environment for Bitcoin merchants and customers.

Moreover, the BitLicense-like proposal can negatively affect the growth of the cryptocurrency gambling industry and further restrict people from accessing the Bitcoin casino games online.

Do you think such bill or similar policies are essential to the development and adoption of Bitcoin?

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