California Governor Vetoes a Crypto Regulatory Bill, Wants More Clarity

Gavin Newsom – Governor of California – refused to sign legislation that would have required cryptocurrency firms and individuals in the state to gain a certain license to operate in the area. Instead, he argued that the authorities should impose more flexible rules to “keep up with rapidly evolving technology and use cases” of digital assets.

Earlier this year, Governor Newsom issued an executive order on cryptocurrencies, aiming to establish a bridge between California businesses and blockchain technology.

Saying ‘No’ to Harsh Regulation

Several months ago, California Assembly introduced a proposed crypto regulation bill AB 2269, called “Digital financial asset businesses: regulation.”

If approved by the relevant officials, the legislation would prohibit individuals or business enterprises in the region from engaging with digital assets without obtaining a mandatory license from the California Department of Financial Protection and Innovation (DFAI). In addition, the agency would require firms to keep records of all local client activity for at least five years.

However, Governor Gavin Newsom (known as a proponent of the blockchain industry) vetoed the proposed bill. In his view, such legislation would be a “costly undertaking,” and the authorities would need a loan from the general fund in “the tens of millions of dollars” to enforce the rules.

He outlined that the digital asset sector has become increasingly popular in California, and as such, the upcoming regulations should not halt the “rapidly evolving technology.” Subsequently, he vowed to cooperate with the US officials and implement crypto-friendly rules in the region in the near future:

“I am committed to working collaboratively with the Legislature to achieve the appropriate regulatory clarity once federal regulations come into sharper focus for digital financial assets while ensuring California remains a competitive place for companies to invest and innovate.”

Newsom Wants California to Become a Crypto Hub

In May this year, the politician introduced an executive order on digital assets, which layed out a road map for regulatory and consumer protections and examined how blockchain technology could be incorporated into the California business sector. Speaking on the move was Dee Dee Myers – Senior Advisor to Governor Newsom:

“Of the 800 blockchain businesses in North America, about a quarter of them are in California, dramatically more than any other state. We’ve heard from so many that they want to be here, and we want to help them do that responsibly.”

Noting the huge potential of the crypto industry, Newsom’s order also aimed to turn California into a global center of blockchain technology.

“The opportunities are almost endless. We can do things like remove middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identities and provide benefits to people through government services,” Myers stated.