Bitcoiners may have to rewrite the California Constitution to make Bitcoin legal tender. This is a bottom-up strategy, just like bitcoin,” said bitcoin enthusiast Dennis Porter, who is pushing to get the measure passed. “The states have the final say on what is in the Constitution, and if necessary, we’ll go to an Article V and rewrite it.”
Bitcoiners may have to rewrite the California Constitution
Assembly Bill 2698 was proposed by Republican State Rep. Jordan Cunningham on February 19. Since then, the bill has been referred to a committee. According to Ian Calderon, former California State Assembly majority leader and principal of political advocacy group Majority Advisors, the goal is to make bitcoin legal tender in the state, but the procedure is hard.
“What we’re working through right now is that we have to be careful about how we say it because listing bitcoin or ethereum, or any other specific asset, could be detrimental,” Calderon said. “It’s important to leave flexibility for businesses and local governments that would accept cryptocurrency as payment.”
According to the Constitution, state legislators are responsible for defining “legal tender,” according to Preston Byrne, a partner at Anderson Kill.
Byrne explained, “The move is mostly symbolic.” “The coinage clause of the Constitution states that Congress has sole authority to define what is and isn’t legal money in the United States.”
Bitcoin and other digital assets are now accepted as payment by several companies in California and across the United States. Calderon stressed the importance of establishing a clear law.
“I know of a county that wants to set up a virtual currency pilot program, but they’re worried that after they’ve invested time, energy, and resources into developing this pilot program, the state will come in and pull the rug out from under them and say, ‘No, you can’t do this — this isn’t legitimate,'” Calderon said.
Businesses and governments will be able to work within regulatory constraints if there is more transparency, he noted. According to Porter, the law will also address issues around cryptocurrency taxation, which could delay crypto development.
“It’s critical that we get to a point where the typical individual, who is trying to pay for groceries or rent with digital assets, can do so without incurring a significant tax or accounting burden,” Porter said.
A bill comparable to the assembly bill was sponsored in the California Senate at the same time. California residents would be able to pay for state services using cryptocurrency under Senate Bill 1275, presented by Democrat Sydney Kamlager. Calderon and his crew are also in favor of the bill.
“We’ve started working directly with [Kamlager], helping her design her bill’s text as well, so that we may have two attempts in this space, one in the Senate and one in the assembly, to try to boost our odds of getting anything under the governor’s desk,” he added.
The state of California isn’t the first to contemplate making bitcoin an official tender. Arizona State Senator Wendy Rogers sponsored a bill in January that would make bitcoin legal cash in the state.
“At best, this is an indicator of what state lawmakers are thinking,” Byrne said, “and tomorrow’s federal legislators are frequently found getting their foundational training in today’s state legislatures.”
Calderon believes that the campaign in California is about making a larger statement, but getting the bill passed is still the goal. “The validity of it advancing through a couple of committees, possibly getting out of the assembly, going to the Senate…even if the governor vetoes it, this is enormous,” he added. “People want clarity, they want consumer protection, and they want to know what they can and cannot do.” This is a contribution to the effort.”
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