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Washington Lawmakers Are Trying to Keep Bitcoin Out of Pot Shops

UPDATE (19th January 22:25 BST): This article has been updated with comment from Sen. Ann Rivers, the primary sponsor of the bill.

A new bill filed in the Washington State Senate is seeking to prohibit local marijuana businesses from using bitcoin.

Sponsored by Senators Steve Conway and Ann Rivers, SB 5264 seeks to amend some of the state’s rules governing the sale and distribution of marijuana products. The move comes more than four years after Washington voters passed a ballot measure legalizing marijuana in November 2012.

Under the proposed rule, businesses that work in the local marijuana industry would not be allowed to either pay for goods with digital currency or accept those kinds of payments from customers. The bill also includes a definition of "virtual currency" that explicitly targets "digital representation[s] of value used as a medium of exchange, a unit of account, or a store of value", but excludes the "the software or protocols governing the transfer".

Firms that grow marijuana or sell products that incorporate it would be covered under the proposed law's provisions.

The bill states:

"A marijuana producer, marijuana processor, or retail outlet must not pay with or accept virtual currency for the purchase or sale of marijuana or any marijuana product."

Washington was notably the site of an early adopter of bitcoin among marijuana dispensaries: Spokane-based Kouchlock Productions. The firm began accepting payments in the digital currency in 2014 and would be affected by the new bill (representatives of the company did not immediately respond to a request for comment).

In a statement, Sen. Ann Rivers said that the measure is aimed at boosting transparency in the state's marijuana industry, in a bid to "help move it out of the shadows".

Rivers told CoinDesk:

“One of the goals of my Cannabis Patient Protection Act, which became law in 2...
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