A Californian lawmaker has introduced a bill concerning virtual currency in order to improve the current law regulating money transmission.

 

California State Assembly member Matt Dababneh has proposed a bill on virtual currency as an addition to the Money Transmission law that regulates all activities related to money transmission in the state.  Under the current law, anyone who wishes to engage in money transmission has to be licensed by the Commission of Business Oversight and pay a specified fee. The regulator also requires businesses to deposit a certain amount of funds as security for the money they transmit.

The proposed bill suggests that any virtual currency business should be regulated under the same law and licensed by the same regulator under the same requirements.

The bill defines virtual currency as “any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology”.

Further elaboration includes both centralised and decentralised currencies but excludes digital units used only within gaming platforms. An applicant for a license will have to pay a fee of $5,000 and provide essential information about their business. 

Dababneh is a Democrat who was first elected in November 2013 and defeated a Republican challenger in June 2014. He was the chair of the Banking and Finance legislative session in the beginning of 2015. Earlier this year, he introduced a bill to prevent the euthanasia of lab cats and dogs and proposed to introduce digital driver ID’s that could be installed on smartphones and accessed through an app protected with a secure PIN.

In January 2015, the California Department of Business Oversight commented on Coinbase, a newly launched exchange, saying that the authority had not yet decided whether to regulate virtual currency transactions under the state’s Money Transmission Act. The authority warned consumers that the Coinbase exchange was not regulated or licensed by California.