California state officials are considering the creation of a set of regulations that would seek to inform consumers of the risks associated with using virtual currencies while simultaneously creating safeguards against said risks. The Department of Business Oversight claims that the state’s money transmitter laws, which are currently used to regulate business such as Western Union, are applicable to Bitcoin.
Speaking with Bloomberg, California Department of Business Oversight spokesperson Tom Dresslar said:
The consensus among staff is that the department and commissioner could regulate virtual currency, to some extent, under current state law. Consumers would be the prime concern of any regulatory structure we build — making sure they are fully aware of the risks associated with virtual currency and providing effective, reasonable safeguards against those risks.
While California has undoubtedly lead the country in many new regulatory paths that have made their way East into other states (do you have to pay for a plastic bag at your convenience store?), Bitcoin regulation at the state level, a la the New York BitLicense, is an incredibly difficult challenge to tackle. Federally, there is a Congressman that is currently seeking a five-year moratorium on digital currency/cryptocurrency regulation at the state and federal level. Furthermore, the proposed HR 5777 will also mandate the Internal Revenue Service (IRS) to take a second look at their Virtual Currency Guidance. Furthermore, a new law was signed into effect by California Governor Jerry Brown earlier this year that recognizes Bitcoin, along with other digital and local currencies, as “lawful money,” a step down from “legal tender.”
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