By Kathleen Caulderwood - California lawmakers approved the legalization of Bitcoin (BTC-eUSD) transactions in the state on Monday. But while it will help businesses keep up with the times, critics fear alternative currencies bring new risks with them.
“While these innovations are taking us far in terms of technological advancement, they also expose individual customers and businesses to a wide array of risks, which largely stem from just how easy these innovations are to use,” said Shellye Archambeau, Chief Executive of Palo alto-based software company, in a statement.
“As these payment systems continue to converge and consolidate, and as we bring more functionalities onto our mobile devices, the higher the risk of our devices and data being compromised,” she added.
On Saturday, California governor Jerry Brown signed legislation that cleared obstacles to the use of bitcoin and other alternative currencies, repealing an “outdated” state law that prohibits use of “anything but the lawful money of the United States.” Lawmakers approved the measure on Monday.
Assemblyman Roger Dickinson, Democrat from Sacramento, said the law was appropriate given the current technology landscape.
“In an era of evolving payment methods, from Amazon Coins to Starbucks Stars, it is impractical to ignore the growing use of cash alternatives,” he said in a statement, according to the L.A. Times.
The decision comes just days after Mt. Gox, one of the world’s largest bitcoin exchanges, was approved to begin bankruptcy proceedings after it lost 850,000 bitcoins to hackers earlier this year, worth roughly $500 million.
On Friday, U.S. authorities auctioned off 30,000 bitcoins they seized when they shut down Silk Road, an online black market for illegal services that primarily accepted bitcoin.