Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

Money, Money, Money . . .

Last Friday's post was inspired by a recent article written by Daniel Sanches entitled"Bitcoin vs. the Buck: Is Currency Competition a Good Thing?Economic Insights (Vol. 3, Issue 2, p. 9) in which he observes:

"Indeed, for 150 years, U.S. financial firms such as commercial banks had been prohibited from issuing currency. And even though financial deregulation in the past two decades has provided U.S. banks with the opportunity to issue electronic currency to compete with official money, banks have not ventured into the business of private currency issuance."

This immediately reminded me that California continues to maintain a statutory prohibition on private money:

"No corporation, social purpose corporation, association, or individual shall issue or put in circulation, as money, anything but the lawful money of the United States."

Cal. Corp. Code § 107.  This statute on its face bars the issuance of money by a California state chartered bank because the bank is a "corporation" as defined by the GCL.  Cal. Fin. Code § 1004(a) ("A California state bank is a corporation incorporated under Division 1 (commencing with Section 100) of Title 1 of the Corporations Code that is, with the approval of the commissioner, incorporated for the purpose of engaging in, or that is authorized by the commissioner to engage in, the commercial or industrial banking business.") and Cal. Corp. Code § 162.  As California's banking regulator, the Commissioner of Business Oversight has the authority to enforce this prohibition on California chartered banks.  The Commissioner, however, does not have the authority to enforce the General Corporation Law against California corporations that are not licensed under the banking law or one of the many other laws that the Department of Business Oversight administers.

Share on:

Financial Institutions

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

RECOGNITION

JDSupra 2018

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

YOUTUBE

FACEBOOK