Legislator Proposes Enactment Of The Uniform Regulation of Virtual Currency Businesses Act
Last month, California joined Hawaii, Nevada and Oklahoma in considering enactment of the Uniform Law Commission's Uniform Regulation of Virtual Currency Businesses Act. California's bill, AB 1489, was introduced by Assembly Majority Leader Ian C. Calderon. According to the ULC, the URVCBA "creates a statutory framework for regulating companies engaged in virtual currency business activity" and "eliminates legal gray areas for licensing and supplies the certainty needed for both regulators and the virtual currency industry".
The bill defines "virtual currency", with some exceptions, as "a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender". If find the term "digital representation" to be a bit puzzling. "Digital" is derived from the Latin noun digitus meaning a finger. Because humans typically are endowed with 10 fingers, "digital" has come to mean numbers less than 10. In modern times, the adjective is often used to describe computer technology because most, but not all, computers operate using binary digits (i.e, 0 and 1). These computers are known as digital computers. The other type of computer is an analog computer.
Given the different meanings of "digital", the meaning of "digital representation" is ambiguous. Although I doubt that the drafters of the URVCBA intended to define "virtual currency" as value that could be represented on one's fingers or in numbers less than 10, I'm not sure what is meant by a computer representation of value. Perhaps a more accurate understanding is that virtual currency is a medium of exchange, unit of account, or store of value that is processed and maintained by computers.