The California Assembly yesterday approved a bill that would regulate how businesses dealing in virtual currency can operate, in a manner similar to banks, according to local media reports. It was approved by a vote of 50-16.
Bill AB-1326, “Virtual Currency”, contains some similarities with the recently finalized New York BitLicense regulations– including mention of a $5,000 application fee for the license. However, the bill generally aims to treat virtual currency with no stricter measures than would be applied to regular money. The bill has been cited to support arguments that New York’s regulations are unnecessarily onerous.
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Among its provisions:
- Licensees are required to maintain sufficient capital reserves.
- They pay an annual $2,500 license renewal fee, plus an annual fee of $125 for each office it maintains in the state.
- Examinations by the commissioner are charged at a rate of $75/hour. The commissioner may examine the business “at any time and from time to time,” including its branches located outside the state.
- Records of transactions need to be maintained for a duration as specified by the commissioner.
- A $1,000 penalty is levied for each violation of the regulations, or for continuous violations, $1,000 for each day it continues.
Recent amendments stipulate the exemption of software providers and people contributing “computing power to a virtual currency network” (i.e. mining), similar to recent iterations of New York’s regulations. Another clause stipulates that “centralized virtual currencies” (e.g. those used in gaming platforms) are not subject to the regulations.