The state of California overhauls a bill on the popular cryptocurrency Bitcoin, that has been inactive since last September. After being scrutinized, the proposed Act is now updated and no longer proposes to license businesses engaged in financial applications of the blockchain technology, but would instead create a Digital Currency Business Enrollment Program.
According to the bill, digital currency businesses would be required to pay a non-refundable $5,000 fee to participate in the program (a cost equal to the New York BitLicense application fee). There is also a continuing cost of $2,500 annually, and the text proposes giving the program commissioner the authority to impose “a claim for civil penalties” of up to $25,000. The proposed changes and especially civil penalties are already heavily criticized by opponents of the bill, which is now awaiting a second reading by Senate.
If the bill, named AB1326, is signed into law, California-based companies that handle bitcoin may find themselves subject to dealing with extensive paperwork and legislative complications.
The New York Department of Financial Services has set the framework for “virtual currency” businesses back in 2015 and many find the BitLicense as a model for how cryptocurrency regulation matters should be handled.
Along with its growing popularity, Bitcoin and cryptocurrencies on the whole, already raise a number of questions and concerns: is it money or not, does it pose threats to financial stability, etc. The European Commission has already made some steps towards regulation of cryptocurrencies. Certain countries, like Japan, are embracing the use of cryptocurrencies for payments, while Russia is considering banning all existing ones and introducing its own.