California Governor Vetoes Anti-Cryptocurrency Bill! Here’s His Message

California Governor Gavin Newsom has warned of a possible so-called “BitLicense”-like issue in New York. cryptocurrency vetoed the licensing and regulation bill.

Assembly Bill 2269, sponsored by Congressman Tim Grayson, would create a licensing regime for anyone hoping to facilitate cryptocurrency transactions, comparing it to the way money transmissions are currently regulated by the Money Transmission Act.

California Governor Issues Message After Vetoing Cryptocurrency Law

In his message announcing his veto, Newsom said:

“On May 4, 2022, I issued executive order N-9-22 to position California as the first state to establish a transparent regulatory environment that both promotes responsible innovation and protects consumers who use digital asset financial services and products.

Over the past few months, my management has conducted extensive research and outreach efforts to gather insights on approaches that balance benefits and risks to consumers, comply with federal guidelines, and incorporate Californian values ​​such as equity, inclusion, and environmental protection.”

Newsom wrote that it would be “premature” to establish a licensing regime without considering feedback from this administrative order. Newsom also pointed out that federal legislation or regulations may be made in the future.

The California legislature passed the bill last month. If enacted as law, California-licensed entities would only be allowed to interact with stablecoins issued by banks or licensed by the state Department of Financial Protection and Innovation. This situation would last until 2028.

The bill, which was vetoed, also stipulated that the reserves of stablecoin distributors be equal to the amount of coins in circulation. In addition, in the law bitcoin and licensing and inspection rules for crypto money companies were also established.

“Needs A More Flexible Approach”

“A more flexible approach is needed to ensure that regulatory oversight can keep up with rapidly evolving technology and use cases and is tailored with appropriate tools to address trends and mitigate consumer harm,” Newsom wrote in the letter.

Newsom also noted that the new licensing and regulatory system would require a multimillion-dollar loan, which was not factored into California’s annual budget process.

The governor of California ended his statements on the subject as follows:

“I am determined to work collaboratively with the Legislature to achieve appropriate regulatory clarity as federal regulations become more prominent for digital financial assets, while ensuring that California remains a competitive place for companies to invest and innovate.”

*Not investment advice.