California Governor Vetoes Cryptocurrency Licensing Bill

The California Assembly did not support a bill to regulate digital assets for the US South Coast, similar to the New York BitLicense.

State Chief Executive Gavin Newsom said it would be premature to create a licensing regime without taking into account feedback on its own Executive Order N-9-22, which aims to make California the first state to create a transparent regulatory environment for cryptocurrencies. The executive order promotes innovation and protects consumers using financial services and digital asset products, the Governor said.

Newsom noted that the veto came in the context of a rapidly changing landscape of federal regulation:

“Over the past few months, my administration has conducted extensive research and outreach to gather information about approaches that balance consumer benefits and risks, are consistent with federal regulations, and take into account California values ​​such as fairness, inclusion, and environmental protection.”

He pointed to the possibility in the future to adopt a federal law or some general rules for regulating cryptocurrencies:

“A more flexible approach is needed so that regulatory oversight can keep pace with rapidly advancing technology, as well as use the proper tools to keep abreast of trends and mitigate harm to consumers.”

Newsom warned that the new regime for licensing and regulating cryptocurrencies would require a multimillion-dollar loan that was not accounted for in California’s annual budget.

To recall, State Assemblyman Timothy Grayson’s bill to create a licensing regime for anyone hoping to facilitate crypto-currency transactions, similar to how remittances are now controlled by law, was filed for signature by the Governor of California in early September.