SACRAMENTO, Calif.—A bill that would govern virtual currency business activity that takes place with or on behalf of residents has been introduced in the California General Assembly by Majority Leader Ian Calderon (D-57th District).
Assembly Bill 1489 is similar to New York’s BitLicense and would require companies to go through an approval process to conduct crypto-related activities in the state, The Daily Hodl reported.
According to the legislation: “This bill would enact the Uniform Regulation of Virtual Currency Businesses Act. The bill would prohibit a person from engaging in virtual currency business activity, or holding itself out as such, unless licensed or registered with the Department of Business Oversight, subject to a variety of exemptions.”
The bill does not consider virtual currencies (also known as cryptocurrencies and digital assets) to be legal tender, whether or not it is denominated in legal tender. It says virtual currency is a representation of value for exchange, storage of value, or unit of account, The Daily Hodl noted.
How Virtual Currency is Defined
The news outlet explained the bill defines virtual currency business activity in section 25: “Exchanging, transferring, or storing virtual currency or engaging in virtual currency administration, whether directly or through an agreement with a virtual currency control services vendor.
“Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.”
If passed into law, virtual currency businesses would have to meet requirements for licensure with stipulations on net worth, security and reserves. Entities may be subject to examination, consolidations and data sharing to maintain compliance, The Daily Hodl explained, adding that Section 3103 of AB-1489 suggests several groups may be exempt from provisions, including banks.
“People with money transmission licenses or who provide only data storage or security services for crypto-related business, as well as anyone conducting crypto investments and transactions for personal use would be exempt as well,” The Daily Hodl said.