The cryptocurrency and the cannabis industry undertook a significant step as they joined hands with each other, when California’s Berkeley city council member Ben Bartlett purchased cannabis with crypto assets, at a city dispensary 4 days back. This is significant for the crypto industry and its enthusiasts, as the cryptocurrency makes its debut into the cannabis industry, something that they had been waiting for long, with an elected official using digital assets to buy cannabis, for the first time. The official had used Bitcoin cash (BCH) and Cred’s LBA token to undertake the transaction at the Ohio Cannabis dispensary in Emeryville.
However, this purchase was not made without a purpose as it was part of a demonstration that was conducted in facilitation with the Blockchain Advocacy Coalition on September 10. Cred, a digital currency financial platform had organized a live presentation of digital financial technology during which the transaction was made for demonstration. One of the other purposes of the event was also to focus on the AB 953, which is a bill sponsored by the Blockchain Advocacy Coalition. The bill would allow the state to accept cannabis tax remittance through stablecoins which is a price-stable cryptocurrency with a 1:1 ratio with the US Dollar brought out by the Universal Protocol Alliance, subject to its passage.
Barlett remarked in a press conference that,
By providing a cash-free method of cannabis tax collections, AB 953 can reduce costs and safety risks for cities and businesses. The Green Rush is a 21st-century industry; it deserves 21st-century legislation. Tax collections leveraging stablecoin technology will help bring this new industry into the light.
Thus the purchase, being part of the demonstration showed the practical advantages of using stablecoins and blockchain settlements in particular and crypto or digital technology in general, as the Cred group showed the elected officials how these digital currency solutions operate. Dan Schatt, the co-founder of Cred showed during the demonstration as well as emphasized on the obvious benefits of digital currencies than the traditional payment services. In his words,
We are thrilled to build technologies that solve real problems of customers, merchants, and politicians which will help usher in the next 100 million users of crypto.
California has always been a pioneer in the field of digital technology and innovation with major hubs like Silicon Valley and was on the forefront of legalizing the use of cannabis for medical purposes way back in 1996. Recreational uses were permitted about two decades later in the state. However, the state-endorsed cannabis industry remains largely outside the purview of banking services and therefore face major issues in dealing with financial institutions. The industry faces huge risks as they conduct their business mainly through large cash deposits, and this is true for other cannabis-friendly states like Colorado and Oregon as well where almost 70 percent of this industry is unbanked. Therefore this event holds a great degree of importance as California is trying to pass progressive legislation that will enable such businesses to operate without much hassle. As was demonstrated the transaction through Cred took just a few seconds, the dispensary also incurred relatively low transaction fees, and sales and tax proceeds were settled in the Universal Dollar.
The shift from traditional to digital currency is not one without obstacles as there remains a negative perception about digital assets among the general public, especially that higher officials should not be using cannabis. Barlett has thus taken a major stride with not only being the first elected official in buying cannabis with crypto assets but also in announcing that he will request a report from the Berkeley city officials, highlighting the pros of local government using this technology to accept cannabis taxes.