Bitcoiners in California are seeking to make their state the first to recognise cryptocurrencies as legal tender, even if it means going against the US Constitution.
“This is a bottom-up approach, just like bitcoin is a bottom-up approach,” said bitcoin advocate Dennis Porter, who is working to advance the bill. “The states have the final say over what is in the Constitution, and if we have to, we’ll go to an Article V and we’ll rewrite the Constitution.”
Jordan Cunningham, a Republican state representative, proposed Assembly Bill 2698 on February 19. The bill was subsequently referred to a committee.
According to Ian Calderon, former California State Assembly majority leader and principal of political advocacy group Majority Advisors, the goal is to make bitcoin legal tender in the state, but the procedure is hard.
“What we are working through right now is that we have to be careful about how we say it because it could be detrimental to list bitcoin or ethereum, or any other specific asset because it’s important to leave flexibility for businesses and local governments that would accept cryptocurrency as payment,” Calderon said.
According to the Constitution, state politicians are responsible for defining “legal tender,” according to Preston Byrne, the partner at law firm Anderson Kill.
“The move is largely symbolic,” Byrne said. “The coinage clause of the Constitution means that the power to determine what is and isn’t legal tender in the United States is the exclusive province of Congress.”
Some establishments in California and around the United States now accept bitcoin or other digital assets as payment. Calderon, on the other hand, believes that establishing a clear law is critical.
“I know of a county that wants to put in place a pilot program for virtual currencies, but their concern is that down the line after they’ve put time, energy and resources into developing this pilot program, the state comes in and yanks the rug out from underneath and says ‘No, you can’t do this — this isn’t legitimate,’” Calderon said.
He noted that providing clarification will assist firms and governments to work within regulatory guidelines. According to Porter, the measure will also clarify difficulties around cryptocurrency taxation, which may delay crypto development. He noted that providing clarification will assist firms and governments to work within regulatory guidelines. According to Porter, the measure will also clarify difficulties around cryptocurrency taxation, which may delay crypto development.
“It’s very important that we get to a place where the average person, someone who’s trying to pay for their groceries, someone who’s trying to pay for rent in digital assets can do so without a massive tax or accounting burden,” Porter said.
A bill comparable to the assembly bill was sponsored in the California Senate at the same time. California residents would be able to pay for state services using cryptocurrency under Senate Bill 1275, presented by Democrat Sydney Kamlager. Calderon and his crew are also in favour of the bill.
“We’ve started working directly with [Kamlager], helping her craft her language for her bill as well, so that we could have two efforts in this space, one in the Senate, one in the assembly, to try to increase our odds of getting something under the governor’s desk,” he added.
The state of California isn’t the first to contemplate making bitcoin an official tender. Arizona State Senator Wendy Rogers sponsored a bill in January that would make bitcoin legal cash in the state.
“At best this is an indication as to what state legislators are thinking, and tomorrow’s federal legislators are often found getting their foundational training in today’s state legislatures,” Byrne said.
Calderon believes that the campaign in California is about making a larger statement, but getting the bill passed is still the goal.