California’s crypto bill, officially known as Assembly Bill 2269, aimed at enforcing crypto licensing and regulatory framework in the state, was vetoed by Gov. Newsom.
The proposed bill faced no objection from the opposition in the assembly.
Gov. Newsom believes that the bill is too rigid and is unlikely to safeguard consumers due to the fast-moving nature of the crypto industry.
In a major setback to the crypto industry, California Governor vetoedAssembly Bill 2269, popularly referred to as the crypto bill in the state.
The bill’s intended purpose was to grant operational licenses to crypto firms currently operating in California and make it mandatory for any company planning to offer crypto products & services in the state.
Surprisingly, the bill moved to the Governor for approval after facing no opposition in the assembly. That said, Gov. Newsom does have his reasons behind his decision to veto the bill.
Governor Newsom believes that the proposed bill fails to incorporate the fast-moving nature of the crypto ecosystem and its underlying technology. Instead, the bill adopts a rigid licensing and regulatory framework, which fails to take consumer safety into account.
He notes, “It is premature to lock a licensing structure in statute without considering both this work (in-house efforts to create a transparent regulatory environment) and forthcoming federal actions.”
Another reason Gov. Newsom gives is the costly nature of greenlighting such a bill, highlighting that this may cost a whopping “Tens of Millions of Dollars” in the first few years. As such, the expense must be accounted for in the annual budget.
Relevant Article: The White House Launches a Comprehensive Framework for Crypto Assets
Despite vetoing the bill, Gov. Newsom is not against the crypto industry. In fact, he concluded his statement, noting, “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.”
If we turn the clock backward, we will see many positive comments from Gov. Newsom on cryptocurrencies. For instance, he had tweeted in favor of making Bitcoin a regular thing in political donations.
Hence, once the federal government comes out with concrete plans on crypto regulations with a clearer stance on the legality of digital assets, Gov. Newsom will take a decisive step on the state’s crypto bill. At the same time, the bill will have to meet Gov. Newsom’s expectations by incorporating the changes & sync with the fast-moving nature of the crypto assets and their underlying technology. So, all eyes will be on the federal government’s next move when it comes to crypto regulations, as it will influence Gov. Newsom’s decision to give the go-ahead to the state’s crypto bill.
VASPs need a Travel Rule Solution to begin complying with the FATF Travel Rule. So, have you zeroed on it yet? We have the best solution to suggest: Veriscope! Veriscope is the only frictionless Crypto Travel Rule compliance solution.