To make Bitcoin legal tender in CA, Bitcoiners may need to rewrite the Constitution

To make Bitcoin legal tender in CA, Bitcoiners may need to rewrite the Constitution

California Bitcoiners hope to make the state the first to accept the cryptocurrency as legal tender, even if it means violating the US Constitution.

“This is a bottom-up approach, just like Bitcoin is a bottom-up approach,” said Bitcoin advocate Dennis Porter, who is working to advance the bill. “The states have the final say on what’s in the Constitution, and if we have to, we’ll go to an Article V and rewrite the Constitution.”

Republican State Rep. Jordan Cunningham introduced the meeting Bill 2698 February 19th. The bill has since been referred to committee.

The goal is to establish Bitcoin as legal tender in the state, but the process is complicated, according to Ian Calderon, former California State Assembly majority leader and head of the political advocacy group Majority Advisors.

“What we're going through right now is that we have to be careful how we say it because listing Bitcoin or Ethereum or other specific assets could be detrimental because it's important to allow flexibility for companies and local governments to accept cryptocurrency as payment,” Calderon said.

Under the Constitution, the definition of “legal tender” is the domain of state legislatures, said Preston Byrne, a partner at law firm Anderson Kill.

“The move is largely symbolic,” Byrne said. “The Coinage Clause of the Constitution means that the power to determine what is and is not legal tender in the United States is reserved exclusively to Congress.”

Some companies in California and the United States currently accept Bitcoin or other digital assets as payment. However, creating a clear law is essential, said Calderon.

“I know a county that wants to implement a virtual currency pilot program, but their concern is that at the end, after putting time, energy and resources into developing that pilot program, the state will come in and rip the rug out from under it and say, 'No, you can't do that - that's not legitimate,'" Calderon said.

Providing clarity will allow companies and governments to work within regulatory guidelines, he added. The bill will also serve to clarify cryptocurrency taxation issues, Porter said, which could slow crypto adoption.

“It's very important that we get to a place where the average person, someone trying to pay for their groceries, someone trying to pay rent in digital assets, can do so without a massive tax or accounting burden,” Porter said.

When the assembly bill was introduced, a similar bill was introduced in the California Senate. Senate Bill 1275, introduced by Democrat Sydney Kamlager, would allow California residents to pay for government services with cryptocurrencies. Calderon and his team also support this bill.

“We started working directly with [Kamlager] and also helped her craft her language for her bill so that we could have two efforts in this area, one in the Senate, one in the Assembly, to try to increase our chances of getting something under the governor's desk,” he added.

California is not the first state to consider making Bitcoin legal tender. In January, Arizona state Sen. Wendy Rogers retired The invoice that would legalize Bitcoin as legal tender in the state.

"At best, this is an indication of what state legislators are thinking, and tomorrow's federal legislators often get their basic training in today's state legislators," Byrne said.

The effort in California is about making a broader statement, Calderon agrees, but passing the law is still the goal.

“Just the introduction and the legitimacy of moving through a few committees, maybe getting out of the Assembly, going to the Senate ... even if the governor vetoes it, that's huge,” he said. "People want certainty, they want consumer protection, they want to know what they can and can't do. This is part of that effort."

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The post To Make Bitcoin Legal Tender in CA, Bitcoiners May Have To Rewrite Constitution is not financial advice.