California Governor Jerry Brown recently signed into law AB 129, a bill intended to ensure that the use of various forms of alternative currency does not violate California law. Section 107 of the California Corporations Code, which previously prohibited an individual or corporation from issuing or putting into circulation “anything but the lawful money of the United States,” was repealed under AB 129 to clarify that the code does not prohibit the issuance and use of alternative currency.
The first alternative currency addressed in detail in the bill’s comments—Bitcoin—appears to have been the primary motivation for California lawmakers’ introducing and approving the bill, and Bitcoin stands to benefit the most from the new law’s clarity. This acknowledgement and approval of alternative currencies is a step forward for Bitcoin, however, there are still hurdles that proponents of cryptocurrency must consider, including how to alleviate the security concerns associated with the issuance, storage, and use of Bitcoin.
A detailed description of the rationale for the law and a brief background of Bitcoin are included in the California Assembly Bill Analysis of AB 129.