The state of California has introduced a bill on February 21 allowing cannabis-related businesses licensed under its Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to have the option to pay their taxes in the state via stablecoins.

Specifically, Assembly Bill 953 of the California State Assembly states that it will take effect as of January 1, 2020. It says a city or county in the state may have the freedom to “determine and implement a method by which a licensee under MAUCRSA may remit any city or county cannabis license tax amounts due by payment using stablecoins”.

A city or county could also choose to either accept stablecoins directly into a digital wallet it controls or utilize a third-party digital asset payment processor that converts stablecoin payments into US dollars to deposit into an account of that jurisdiction.

Cointelegraph noted that although cannabis has been legalized in several US states, some cannabis businesses still face challenges obtaining basic financial services from banks – partly why cannabis businesses have also been known to deal largely in huge chunks of cash.

California’s bill is read as an attempt by the state to reduce the large amounts of cash that its offices have to process. California State Treasurer Fiona Ma observed that “duffle bags and sometimes suitcases of cash would arrive quarterly at some of our designated offices and some business owners had to drive 350 miles to pay their taxes”.

California is not the first state to begin liberalizing its tax payment methods by offering crypto as a payment option. Ohio, as reported by TheCryptoSight, was the first state to allow companies the added choice to offset at least some of their tax burdens through Bitcoin since the last quarter of 2018.

A key difference, however, is that unlike California which will allow for direct tax payments in crypto, Ohio stresses that any and all payments by Bitcoin must be converted by an approved crypto exchange into US dollars to be paid to the state.