- 13 October 2022
- Posted by: Cryptovalues
- Category: Central Banks, Cryptovalues News, World News
California Governor Gavin Newsom has vetoed a bill that aims to create licensing requirements for cryptocurrency exchanges and companies in the state.
The bill, sponsored by Democratic Congressman Tim Grayson, was passed by the state Assembly and Senate last month. The Digital Financial Assets Law will create a much-needed framework for the cryptocurrency space.
In his letter to the California State Assembly, Newsom justified the measure by stating:
“Concerns about locking down a licensing structure are premature,” continuing with “the need for a more flexible approach that can balance the new and differing needs of a changing technology with its disparate use cases. Also crucial is the creation of a transparent environment for companies using blockchain in order to balance the benefits and risks for consumers.”
The governor points out the financial constraints of the bill, in fact this bill would require borrowing from the general fund in the tens of millions of dollars for the first few years and before committing, he is waiting for regulations from the White House, which he would definitely like to be clearer before creating the infrastructure aimed at transposing the law at the federal level.
Federal agencies and White House offices have recently issued various reports on different aspects of digital assets, from cryptocurrency mining to CBDCs, which have drawn several criticisms from industry experts as unclear and, when understandable, extremely punitive for the industry.
Unlike New York, where there is a strict licensing requirement, digital asset companies in California will continue to enjoy some flexibility, and this is thanks to Governor Newsom, who, in May had signed an executive order to officially build a framework for the use of cryptos, tasking several state agencies to work out the details, with the clear intent of examining ways in which the state can take advantage of blockchain technology and digital assets.
Recall that of the 800 blockchain companies in North America, about a quarter of them have their legal abside in California, far more than any other state.
This is why caution is being preached.
