California legislators are backing the Assembly Bill 953
seeking to permit stablecoins for state payments including fines and taxes.
The bill introduced to the house by the California State
Assembly in February is a step towards solving the cash menace at the county
tax offices especially from cannabis-related businesses. However, businesses
dealing in cannabis will have to use stablecoins particularly to settle their
Stablecoins are cryptos backed by a physical asset like
gold, oil or a fiat currency like the dollar. This way the crypto will have
significant stability, unlike other cryptos, thus making it safe for individual
businesses and the state.
The Assembly Bill 953
The legislators are looking to have the bill in effect as of
January 2010. An excerpt of the bill states that; “The bill would authorize
that city or county in determining that method to either accept stablecoins
directly into a digital wallet controlled by that jurisdiction or to utilize a
third-party digital asset payment processor…”
The bill further provides that the appointed stablecoin to
be used to settle state payments should be easily convertible into the United
States Dollar. The state of California like several other U.S states have
legalized cannabiss dealings and taxed accordingly.
businesses dealing with cannabis have lagged in assessing critical banking
services because most of the banking institutions operate under the Federal Deposit
Insurance Corporation (FDIC) guidelines. The FDIC forbids banking institutions
from serving clients dealing in ventures outlawed by the federal law.
Collecting Cannabis Tax
Due to stringent banking regulations, cannabis operators are
forced to hold on to massive loads of cash that find their way to the state tax
offices for processing.
According to testimony by Fiona Ma, the California State
Treasurer before the U.S House Committee on Financial Services on the process
of Tax collection specifically on cannabis businesses, cannabis operators
travel long distances to submit their taxes in cash which is a great
inconvenience for the businesses and the state.
Back in 2017, the Dash Network fashioned Dash as a payment option for the cannabis industry. Dash aimed at saving the industry about 10-15% in cash boxes, safes, and guards expenses.
A number of US states are warming up to the idea of cryptos and stablecoins as means of state payments. The state of New Hampshire, for instance, proposed a bill to allow state payments in Bitcoins (BTC)
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