A Virtual Currency (BitLicence) Bill (AB 1326) was introduced into the California Assembly on 27 February 2015.
A few days ago, the Senate amended that Bill to create a Digital Currency Business Enrollment Program instead; and it’s now been ordered to 3rd reading.
The Digital Currency Business Enrollment Program will be administrated by the Commissioner of Business Oversight, and last until 1 January 2022.
The Bill prohibits (a) a person from engaging in “digital currency business” without enrolling in the program; and (b) the conduct of “digital currency business” through an unenrolled agent.
An enrollment application will cost up to $5,000, and there’ll be an annual fee of $2,500 to maintain enrollment, once secured. Applicants must provide fingerprints, and give the commissioner consent to share them with law enforcement agencies.
Program enrollees will be prohibited from advertising products, services, and activities unless they include a statement about the program, and make it clear that the government has not reviewed the safety or soundness of the business or digital currencies. Enrollees will also be required to give their customers a receipt that includes prescribed information when they accept digital currency or money, and may be obliged to pay a fine of $100 for each violation of the Bill’s receipt provisions.
The Bill defines:
- “digital currency” as “a digital representation of value that can be digitally traded and is used to facilitate the sale, purchase, and exchange of goods, services, or other digital representations of value among its users [but] not include fiat currency, e-money, or currency value of which was fixed by its issuer to the value of a fiat currency“; and
- “digital currency business” as “the business of offering or providing the service of storing, transmitting, exchanging, or issuing digital currency [but] not [for example, the] Transmission of digital currency where the transaction is undertaken for nonfinancial purposes and does not involve the transfer of more than a nominal amount of digital currency necessary to complete the transaction … [or certain] customer affinity or reward programs...”
The Commissioner will be required to publish an annual report on the state of the digital currency business industry.