Crypto License Bill Vetoed by California Governor Gavin Newsom in Win for Industry
The crypto industry has scored a win with California Governor Gavin Newsom vetoing a bill that would establish a licensing and regulatory framework for digital assets.
Dubbed Assembly Bill 2269, the bill aimed to create a licensing regime for anyone hoping to facilitate crypto transactions, topping the existing regulatory hurdles that players in the crypto ecosystem currently face. The bill was sponsored by Assemblymember Tim Grayson (D) and was passed by the state assembly and senate last month.
“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,” Newsom reportedly said in his veto statement, adding:
“A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases and is tailored with the proper tools to address trends and mitigate consumer harm.”
Newsom noted that prior to establishing crypto licensing initiatives, he wants the federal regulations to “come into sharper focus for digital financial assets.”
If passed, the bill would have mandated all California-licensed entities to deal with stablecoins issued by banks or otherwise licensed by the state Department of Financial Protection and Innovation. In addition, it would have created a licensing regime comparable to New York's "BitLicense."
"The cryptocurrency market is under-regulated at best and deliberately rigged against everyday consumers at worst," Grayson said in a statement on the veto. "A financial market cannot be considered healthy if there are no guardrails in place to protect consumers from scams and bad actors."
The bill also focused on stablecoin issuers,
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