statue of bitcoin liberty
Legislators are now preparing to welcome BitcoinThe General Assembly of the State of Illinois has announced that it has held a hearing regarding the role of virtual currencies and this meeting included a proposed amendment to Illinois’s Transmitters of Money Act. Elizabeth Hernandez, the Democratic representative for area 24 in the Illinois House of Representatives, introduced an amendment to the state’s Transmitters of Money Act seeking to clarify the role of cryptocurrencies, and their use, throughout the state. The Financial Institutions Committee hearing took place at 3.30 p.m on Wednesday (19th of March) in room 413 of the Stratton building in Springfield, Illinois. This meeting has been scheduled at a time when politicians worldwide are asking questions regarding the future of virtual currencies and seeking answers on how they should seek to treat cryptocurrencies going forward.

Illinois is one of many states that are moving, or have moved, to clarify the role of cryptocurrencies. There have been hearings in New York where advocates of Bitcoin addressed the Department of Financial Services on the benefits of embracing crypto, last month, February, California proposed an amendment that would lead to the legalisation of bitcoins as well as virtual currencies and tokens. Connecticut has also recently drafted and published a report on the use of virtual currency. The decision to review The Transmitters of Money Act and seek to include virtual currencies, however the proposed amendment is: Section 110: “Virtual currency: Virtual currency does not have legal tender status. For the purpose of this section “virtual currency” means a medium of exchange that operates like currency in some environments, but does not have all the attributes of real money.”

The status of Bitcoin, according to the amendment, seems to be that it is a currency but not quite a money, it can be used to purchase goods, it can be held as an investment, it is limited in supply (21 million), it is easily transmittable (Portable) and has shown itself to be a safe store of value, it is easily divisible and difficult to replicate (forge)… but it is not legal tender (a medium of payment, allowed by law or recognised by a legal system to be valid for meeting a financial obligation.). As an old professor of mine used to state “Legal Tender is that which must be accepted in payment of a debt.” This is not strictly accurate but what it loses in accuracy it makes up in simplicity.

It is important to note that legislators must allow for legal challenges to their words as well as their decisions, and this requires them to be ‘careful’ about decisions they may decide to make. They must seek to educate themselves on the implications of a new technology, the possible ramifications of proposed changes on existing laws, the constitution and former decisions of the higher courts on the interpretation of legislation. Illinois has moved further that the other states by seeking to put guidelines in place whereas the other states, with the possible exception of California, held meetings merely to seek to inform themselves.

We can reasonably expect other states to follow this lead.