California Governor Gavin Newsom vetoed a crypto bill that would create a framework for companies to acquire a license to offer services tied to transacting in digital assets.
Sponsored by Democrat Assemblyman Tim Grayson, Assembly Bill 2269 passed in the state senate and assembly late last month. The Digital Financial Assets Law proposed a framework for companies in the digital asset space to apply for a license to operate.
“It is premature to lock a licensing structure,” Newsom wrote in a Sept. 23 letter to the California State Assembly. “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.”
New York already issues licenses for “virtual currency business,” known as the BitLicense. Companies, including Coinbase and Square operate in the state via the license, which has had a controversial history.
A new regulatory program is “a costly undertaking, and this bill would require a loan from the general fund in the tens of millions of dollars for the first several years,” Newsom wrote. “Such a significant commitment of general fund resources should be considered and accounted for in the annual budget process.”
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