A bill to allow the California government to begin accepting cryptocurrencies such as Bitcoin as payment for services by state agencies began being discussed in the Senate this week after being introduced last Friday.
Senate Bill 1275, authored by Sen. Sydney Kamlager (D-Los Angeles), currently only has the basics of the bill, simply stating that “a state agency may accept cryptocurrency as a form of payment for the provision of government services”. Limitations, agency specifics, and hard limits of what can and cannot be paid for by cryptocurrency are still not on the books.
However, many in Sacramento expect it to be much like how other states will accept it as currency later this year. Specifically, many believe that cryptocurrency will only be a secondary form of currency and will be immediately converted into dollars once received to avoid any wild swings in the market price, similar to what Colorado will accept cryptocurrency for tax payments come this summer.
“Some lawmakers are currently seeking amendments or clarifications to SB 1275,” “Dana,” a State Capitol staffer, told The Globe on Tuesday. “Many fear that things like Bitcoin and Ethereum are in a bubble and want some kind of guarantee that the amount of cryptocurrency paid will be exactly the dollar amount when converted.”
“Also, it hasn’t been said directly to this bill for a few years, but one MP who spoke to us about it a few years ago said cryptocurrency was like putting money in Beanie Babies twenty years ago. So at least some don’t exactly believe it.
Despite the hesitation of some lawmakers, many states are considering at least accepting cryptocurrency for payments to some degree. This year alone, in addition to Colorado’s approval for later this year, Arizona, Wyoming, Tennessee, Illinois, Georgiaand others have active invoices for accepting crypto payments or offering tax incentives for cryptocurrency mining.
Questions about the stability and environmental impacts of cryptocurrency
Those considering crypto adoption currently don’t know if these bills will pass, especially in states with stringent environmental regulations like California.
“For some, cryptocurrency is here to stay and is an important part of finance and investing in the future, especially with its blockchain technology,” said Austin Carter, cryptocurrency researcher, at the Globe on Thursday. “Billionaires like Elon Musk have said it. To others, cryptocurrency is a huge scam or a pyramid scheme with extra steps, or at best, an extremely speculative market on the verge of crashing. billionaires like Warren Buffet and Charlie Munger even ccompared to the 21st century equivalent of the Amsterdam tulip craze of the 1740s.”
“One thing is for sure, adoption will continue to be slow. I mean you have cryptocurrencies with ads during the Super Bowl now but a lot of people are even wondering that because when was the last time you saw the US dollar or the Euro having an ad looking television? »
“For California though, the questions of legitimacy are there, but that’s far from what the environmental issues might be. Cryptocurrency has a huge environmental impact due to the way it transacts and the amount of energy it needs to keep pace.
According to PC Magazine, a single Bitcoin transaction burns 2,292 kilowatt hours of electricity, enough to power an average US household for 78 days. In terms of carbon footprint, a single bitcoin transaction is equivalent to 2.4 million credit card or bank transactions. Each year, Bitcoin transactions alone require as much energy as it takes to power the country of Thailand, its carbon footprint being equivalent to that of the country of Kuwait.
“Eco-conscious Californians, especially senators and members of the Assembly, will have a field day with environmental impacts. Bill SB 1275 will likely be shredded. The state doesn’t want to add an extra hue to its carbon footprint these days, so in order for the bill to pass, it needs to overcome the environmental issue.
SB 1275 is expected to be heard in Senate committees soon.