In recent years, digital cryptocurrencies have emerged as a popular financial instrument and alternative to cash. Users appreciate them for their anonymity and independence from the moody whims of central bankers. Despite operating in a legal gray area due to the fact that previous laws and regulations couldn’t have envisioned the peer-to-peer technology behind many digital currencies, their use is widespread. Mainstream companies like Dish Network, Overstock.com, and TigerDirect allow customers to purchase products in bitcoin. Apple recently gave the nod to developers who want to create apps that accept bitcoin payments, and Yahoo, Bloomberg, and Google Finance have added tickers tracking its price movements.

However, despite mainstream acceptance of digital currencies, a California law dating back decades technically banned their use. In May of 2013, the California Department of Financial Institutions sent a cease-and-desist order to the Bitcoin Foundation, a conflict that Sacramento Democratic Assemblyman Roger Dickinson sought to resolve with AB 129, a bill that repeals a section of California’s corporate code banning private companies from issuing private currencies into circulation. On Saturday, California Governor Jerry Brown signed the bill into law, thus formally legalizing the use of bitcoin and other digital currencies.

Also at issue were proprietary payment methods like Amazon Coins and Starbucks Stars. Under the legal environment that existed prior to this rule change, such customer loyalty programs could have also been found in violation of the state’s outdated corporate code. California Governor Jerry Brown’s signing of AB 129 provides clarity on the use of digital currencies and represents the first time a US state has legally recognized bitcoin. Assemblyman Roger Dickinson told the Los Angeles Times that his bill was aimed at recognizing something that was already taking place.

The bill passed amid a weekend signing spree which included the repeal of a regulation requiring restaurant workers to wear gloves when handling ready-to-eat food items and modifications to truancy laws in an effort to cut back on the jailing of students for skipping school.