A Californian law has finally removed a ban on using currencies other than the USD. The new legislation of the state will encourage the growing use of alternative payment currencies, including Bitcoin.
The state Governor Jerry Brown has signed a new law, which is expected to boost confidence around the most popular cryptocurrency, while regulators all over the world examine how to address it.
Previously, Section 107 of California’s Corporations Code prohibited companies or individuals from issuing money other than US dollars. The law was introduced by the Assembly Member Roger Dickinson, who claimed that digital currencies, as well as community currencies and reward points could technically be illegal, but still not penalized. For instance, Amazon’s Coins to Starbucks’ Stars were cash alternatives and were in violation of the law too.
Three months ago, the Internal Revenue Service of the United States announced that it will treat Bitcoin as a kind of property for tax purposes, not as currency. In other words, IRS made it subject to similar rules, just like stocks and barter transactions. People who receive goods and services in Bitcoin will now have to add the value of the virtual currency at the time they received it into their gross income. In the United Kingdom, for example, HM Revenue & Custom decided that exchanging or mining Bitcoins was exempt from value added tax (VAT) in the country, but accepting the cryptocurrency for goods and services is subject to it.
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