In the world of digital currency, misinformation spreads quickly, and there may be no greater recent example of this than California Assembly Bill 129, a piece of proposed legislation that has been heralded somewhat incorrectly as an already successful move by the state to “legalize cryptocurrencies“.
Though, the bill would recognize digital currencies as “lawful money”, it would also ensure the legal footing of additional forms of legal tender such as points and coupons, and is currently only halfway to becoming law.
Regardless, many in the digital currency community have high hopes that AB 129 and AB 786 (a bill passed in September that lowered capital requirements for money transmitters) signal that California will be among the more progressive US jurisdictions when it comes to digital currency.
With this in mind, CoinDesk set out to speak to California Assemblymember Roger Dickinson, the man who introduced both laws, to determine the extent to which the bills were crafted for the still-nascent industry.
However, if bitcoiners were hoping for a more progressive alternative to New York’s Benjamin Lawsky, Dickinson doesn’t exactly fit the mantle.
An advocate for a wide range of issues from job creation to climate change, Dickinson isn’t exactly a bitcoin expert, and he indicates that the laws were not made specifically for virtual currencies. Rather, he said they’re meant to address the sweeping changes that mobile and digital forms of payments are bringing in all their forms.
“It wasn’t so much setting out to look at the issue of alternative currency, it was more evolutionary, leading into the breadth of the subject matter that suggested to us you couldn’t ignore alternative currencies.”
A neutral approach
Dickinson described his state’s approach to digital currency as “neutral”, stating that the bills don’t expressly advocate for the survival or demise of bitcoin.
“We’re not trying to deter or advance the development of alternative currencies. We’re trying to say that to the extent that alternative currencies are developed and in use, we will consider that to be a legally acceptable activity in California.”
Most notable is another thing AB 129 doesn’t do, which is regulate alternative digital currencies. Dickinson indicated that any regulation would need to come from the California Department of Business Oversight and commissioner Jan Owen, who notably has worked for Apple and JPMorgan.
Dickinson did suggest that the issue may be further addressed by California, but stated that he believes digital currency regulation may need federal attention.
A newcomer to the field, Dickinson said that he first learned of bitcoin when developing AB 786. At the time, the California Committee on Banking and Finance had begun looking broadly at digital payment systems, but he said that digital currencies stood out as “intriguing and unavoidable”.
The lawmaker revealed he was surprised by the research, stating:
“Even though there had been actually relatively recent regulation in 2009 establishing guidelines and requirements for money transmission, the practice of money transmission had evolved so rapidly over the course of three years that there was a need to revisit the subject.”
The result has been two bills attempting to bring guidelines up to speed. Yet, Dickinson doesn’t see his legislation as part of the larger digital currency movement, saying he hasn’t looked at how New York regulators are moving on the issue.
Further, he said he hasn’t spoken to any local bitcoin businesses, despite California being a hotbed for innovation in the field.
The future of AB 129
The assemblyman said that though digital currencies have become a lightning rod for controversy, events regarding the now-bankrupt Japan-based bitcoin exchange Mt. Gox, are unlikely to threaten the bill.
Though, Dickinson didn’t rule out that another event could potentially compound the situation and raise additional questions before the end of March or April, when it is expected to be heard in the Senate.
“I think in the end, people will see that what we’re doing is simply that alternative currencies are something we need to recognize out there in the world, and that we shouldn’t have some archaic prescription that applies.”
Even if bitcoin does collapse, Dickinson reasons, that’s not to say that other digital currencies won’t go on. For now, it seems, California is preparing for any and all conclusions.