--- description: California lawmakers approved a bill on Monday that lifted an outdated ban on the use of bitcoin and other alternative currencies. title: California Legalizes Bitcoin and Other Digital Currencies image: https://static.time.com/v3/assets/bltea6093859af6183b/bltd922c727336e9456/698699fa3bc99925d81a456c/california-legalizes-bitcoin.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 ---  * [U.S.](/section/us/) ## U.S. Update your preferences in [Account Settings](/account/preferences/) Close * [Technology](/tag/technology/) ## Technology Update your preferences in [Account Settings](/account/preferences/) Close # California Lifts Ban on Bitcoin  by [Jack Linshi](/author/jack-linshi/)  ## Jack Linshi Update your preferences in [Account Settings](/account/preferences/) Close Jun 30, 2014 9:42 PM CUT  California Gov. Jerry Brown looks on during a news conference at Google headquarters on September 25, 2012. California Gov. Jerry Brown looks on during a news conference at Google headquarters on September 25, 2012.Justin Sullivan—Getty Images  by [Jack Linshi](/author/jack-linshi/)  ## Jack Linshi Update your preferences in [Account Settings](/account/preferences/) Close Jun 30, 2014 9:42 PM CUT California lawmakers approved a bill Monday that lifted an outdated ban on the use of bitcoin and other alternative currencies, as more states seek to clarify and revise virtual currency laws. AB 129, which Governor Jerry Brown had signed on Saturday, will ensure that “various forms of alternative currency such as digital currency” will be legal in purchasing goods and transmitting payments, according to the bill’s [text](http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab%5F0101-0150/ab%5F129%5Fcfa%5F20140128%5F174724%5Fasm%5Ffloor.html "undefined"). The bill reflects the [growing use](http://time.com/2871764/kings-college-accept-bitcoin/ "undefined") of digital currencies, revising Section 107 of California’s Corporations Code that prohibits use of “anything but the lawful money of the United States.” “In an era of evolving payment methods, from Amazon Coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives,” Democratic Assemblyman and the bill’s author Roger Dickinson said in a recent [statement](http://asmdc.org/members/a07/news-room/press-releases/legislation-addressing-alternative-currencies-like-bitcoin-passes-the-assembly "undefined"). Dickinson noted that points and rewards programs function as digital currencies, and thus would not have been legal without the passage of AB 129, which legalizes these “community currencies,” that is, alternative payment systems between businesses and customers. Other states have similarly sought to clarify their bitcoin laws. In March, the Texas Department of Banking [stated](http://www.dob.texas.gov/public/uploads/files/Laws-Regulations/New-Actions/sm1037.pdf "undefined") that bitcoin transmissions, while permitted, are not technically “currency” transmissions. That month, the New York State Department of Financial Services [announced](http://www.dfs.ny.gov/about/po%5Fvc%5F03112014.htm "undefined") the state will accept proposals for a virtual currency regulation system. While bitcoin use is now legal in California, it is not technically [legal tender](http://www.treasury.gov/resource-center/faqs/currency/pages/legal-tender.aspx "undefined"), a status reserved for and defined federally as “United States coins and currency” under the Coinage Act of 1965\. The IRS [clarified](http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance "undefined") in March that bitcoin functions more like property than currency, which means that taxes applying to property transactions also apply to bitcoin transactions. Elsewhere in the world, only [very few countries](http://www.loc.gov/law/help/bitcoin-survey/index.php?loclr=bloglaw "undefined"), notably Brazil and China, have specific regulations of bitcoin use. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/2942212/california-bitcoin-legalize/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/2942212/california-bitcoin-legalize/"},"headline":"California Lifts Ban on Bitcoin","datePublished":"2014-06-30T21:42:12.000Z","dateModified":"2026-04-13T08:02:40.924Z","description":"Technically, all transactions using digital or alternative currencies had been illegal in California until Monday","url":"https://time.com/2942212/california-bitcoin-legalize/","keywords":["Technology","Tech","California","Money","Bitcoin","Currency"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/bltd922c727336e9456/698699fa3bc99925d81a456c/california-legalizes-bitcoin.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Jack Linshi","jobTitle":null,"url":"https://time.com/author/jack-linshi/"}],"articleSection":"U.S.","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/bltd922c727336e9456/698699fa3bc99925d81a456c/california-legalizes-bitcoin.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"California Legalizes Bitcoin","caption":"California Legalizes Bitcoin","creditText":"Justin Sullivan—Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/us/","name":"U.S."}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/technology/","name":"Technology"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/2942212/california-bitcoin-legalize/","name":"California Lifts Ban on Bitcoin"}}]}] ```