The state of California is once again moving forward with legislation that would update its money transmitter rules to capture businesses engaged in digital currency activities. Deemed inactive last September, Assembly Bill 1326 was re-introduced by the legislature this week and has since been read and amended. Given the discussion that surrounded earlier versions of the bill, the update is already being scrutinized, though signs suggest pros and cons remain. Most notably, the bill no longer proposes to license businesses engaged in financial applications of the technology, but would instead create a new Digital Currency Business Enrollment Program. Lasting five years, the proposed program appears focused on helping the state learn more about the emerging technology. According to the bill, companies that store, transmit, exchange or issue digital currency qualify as digital currency businesses and 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 . In addition, there is 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 revised text reads: "The bill would prohibit a person from engaging in the digital currency business without enrolling in the program and would prohibit the conduct of digital currency business through an unenrolled agent." Elsewhere, the bill includes new definitions for digital currency, labelling the technology a "digital representation of value". Concerns raised Due to certain revisions and vague wordings, the bill text has drawn early critics. One person who helped consult California’s Assembly Banking and Finance Committee leading up to the bill’s amendment said that in spite of the softer language, other changes could result in even harsher requirements. Digital currency lawyer and research director for […]
