California has announced it is to allow the use of Bitcoin and other cryptocurrencies as forms of payment, overturning an earlier ban in the state.
State Governor Jerry Brown signed a bill repealing Section 107 of California's Corporation Code, which restricted the use of anything but official US currency in all kinds of commerce.
The bill was authored by Democratic Assemblyman Roger Dickinson, who said that it reflected the popularity of alternative forms of payment already in use in California, including the use of 'community currencies' set up to encourage residents to shop at local businesses. This also includes methods such as coupons and company loyalty points as legal alternative payments.
It includes changes to current laws which will "ensure that various forms of alternative currency such as digital currency, points, coupons or other objects of monetary value do not violate the law when those methods are used for the purchase of goods and services or the transmission of payments."
However the bill does not introduce regulations for Bitcoin, which may fall to other government departments to do so.
"In an era of evolving payment methods, from Amazon Coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives," said Dickinson.
"This bill is intended to fine-tune current law to address Californians' payment habits in the mobile and digital fields."
California is the most popular state in the US, and according to recent LinkedIn statistics, is home to more than 40% of the total number of professionals working in the Bitcoin industry, far ahead of New York and Texas in second and third place respectively.
The news followed an auction of 30,000 Bitcoins over the weekend by US marshals. The haul, worth around $17m, was seized from notorious 'dark web' site Silk Road as part of an ongoing investigation into illegal activities carried out on the site.
Winners have until July 1, to pay the money they owe or the deal will be cancelled, the US Marshals Service said.