Two Democratic members of the state assembly in California have filed a bill to enable legal cannabis operators in that US state to pay their bills in Stablecoin rather than fiat.
The two Democrats, Kevin McCarty and Phil Ting, are protesting against US federal restrictions that are still out of tune with the legalized cannabis industry, which make the use of either cards or digital payments difficult.
McCarty and Ting see cryptocurrency as a possible solution, particularly with an increase in interest in the legalization of pot in other US states. Cannabis was also legalized in Canada last year, where payment institutions are still somewhat reluctant to accept involvement. The solution, as the presenters of the bill see it, would be to change State law to enable operators to pay their city, county and state taxes and fees in stablecoin, a cryptocurrency tied to the US dollar. As the bill points out, “Existing law imposes a state excise tax on the purchase of cannabis and cannabis products, as defined, at the rate of 15% of the average market price of any retail sale by a cannabis retailer.” This is one tax which could be paid using cryptocurrency.
With 47 US states having some element of legalization, financial services are still tied to federal law which still generally classifies marijuana as a drug; an issue which has become a entanglement such services such as card issuers are still reluctant to engage in until the law is clarified, due to the possibility of crossing the law into uncharted terrain where state penalties could be forthcoming.
There are also benefits using cryptocurrency for legal purchases of the drug in an industry which is predicted to grow to USD 5.1 billion by 2020 according to California State Treasurer Fiona Ma. Under the bill, if passed into legislation, federal legislators would no longer be able to penalize banks accepting deposits from legalized operators, and equally loans to such operators could be offered as they would be to other legitimate businesses.
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