California legalizes bitcoin, other alternative currencies

One week after California lawmakers passed a bill that would update currency laws and thus effectively legalizing bitcoins, digital currencies and other alternative currencies, Democratic Governor Jerry Brown signed the bill into law.

Signing the legislation placed on his desk Saturday, the measure will eviscerate the hindrances that bitcoin and other peer-to-peer decentralized virtual currencies potentially faced in the Golden State due to the outdated law.

Under the previous provisions, other kinds of commerce aside from United States dollars were prohibited. This meant that cryptocurrencies, reward points offered by retailers and gift cards were essentially illegal, but were never enforced by authorities.

The bill’s author wanted to ensure the law would adapt to the 21st century.

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

California will officially become the first state to legalize bitcoins and other digital currencies. This will also permit local communities to establish local currencies to spur nearby economic growth and spending.

At the time of this writing, bitcoin is trading at around $620.

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