Gavin Newson, California Governor, vetoed a bill seeking to regulate and license digital coins.
Assembly Man Timothy Grayson introduced Assembly Bill 2269. Nevertheless, the crypto community highly criticized the bill.
The bill passed with a majority on August 30, receiving 71 affirmative votes and zero no votes. That was one day after the California Senate approved it.
Earlier, Grayson stated that though the cryptos’ newness entices investors, it translated to increased consumer risks.
He added that crypto businesses aren’t adequately controlled and don’t have to adhere to several policies that apply to others.
A Green Sign?
Crypto transactions would equal regular cash transactions if Governor Newsom authorized the bill. Meanwhile, that would bring digital coins under Monet Transmission Act purview.
Moreover, the proposed law would have limited California-licensed entities from associating with stablecoins – those not bank-issued or unlicensed by the Department of Financial Protection & Innovation.
The Governor’s Statement
Governor Newsom’s letter to the California Assembly explained his decision to veto the bill. He stated that the intent was to protect individuals from monetary harm amidst the surging popularity of groundbreaking financial assets.
He said it’s premature to price in a licensing mode in statute without contemplating the work and upcoming federal actions.
Newsom trusts a more flexible strategy is essential for regulatory oversight to keep up with hastily evolving use cases and technology.
Moreover, the regulatory team should have the tools to mitigate consumer hurt and address developing trends.
California’s BitLicense?
Individuals criticizing the proposed bill termed it the California version of BitLicense of New York. New York implemented the BitLicense regulation in 2014.
That came amidst crypto rules that wanted businesses to have licenses before engaging in crypto-associated undertakings.
Nevertheless, the regulation met massive disapproval for changing the cryptocurrency landscape within the state. State authorities altered the law in June 2020, following years of complaints and pushbacks.
Moreover, regulators implemented a more flexible framework to smoothen the licensing procedure.
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