New rules set to tighten the restrictions on bitcoin trading in California are set to go into effect this week.
The new rules, which come into effect in 2019, are meant to prevent money laundering, cybercrime and money laundering of drug money, according to the California Department of Finance.
The rules, to be known as the ‘California Cryptocurrency Trading Rule,’ come into force on Monday, July 6, 2019.
The state is expected to begin issuing new certificates of deposit in the digital currency next month, which could make it easier for users to convert it to cash.
California’s new rules would make it a criminal offence for people to use a virtual currency for a financial transaction.
Bitcoin was originally created in 2009 to help people circumvent bank fees and foreign exchange controls in the West.
In 2018, bitcoin surged more than 50 per cent to a record high of $8,898.
In January, the US Justice Department said it was reviewing whether it was legal for the government to seize bitcoin in the US.
Since then, the virtual currency has surged to $11,000.
The government is still considering whether to make it illegal to make transactions with virtual currencies.
The digital currency has been used as a way to evade foreign exchange rules in the United States and in the European Union.
In the UK, bitcoin was banned in April 2017.