California Governor signs law making bitcoin "legal money"

Earlier this week, the California State Assembly sent Assembly Bill 129, which formally recognizes bitcoin and other digital currencies as legal forms of exchange, to the desk of Governor Jerry Brown. Brown signed the bill into law today, making California the first state to give such recognition and legal protection to bitcoin. Although the law doesn’t require merchants or institutions to accept bitcoin, it does effectively repeal a prohibition in California law preventing citizens from using “anything but the lawful money of the United States” in their business.

AB-129’s impact may be limited to California, but its impact will almost certainly be felt across the bitcoin community in coming months. With an estimated 40% of all bitcoin-related U.S. jobs located in Silicon Valley, and tens of millions of venture capital coming into the bitcoin ecosystem from California-based funds, it’s imperative that bitcoin have some legal status in the state. With the State Assembly and the Governor’s Office seemingly giving the greenlight to the rapidly growing bitcoin industry, several parties on the fringe may now decide that bitcoin is becoming a safer bet for investment.

Perhaps even more interesting is how uncontroversial the law seems to be. This time last year, bitcoin was still largely known as a token of exchange for black market sales and as “hacker money.” The idea that the California government would change existing law to accommodate its growth would have been seen as laughable by most people. Yet, the law sailed through the State Senate with 7-1 vote, and then passed the State Assembly with ease, seeing a 52-11 approval.