California governor vetoes crypto regulation bill, wants more clarity

Gavin Newsom – Governor of California – refused to sign legislation that would have required cryptocurrency firms and individuals in the state to obtain a certain license to operate in the area. Instead, he argued that the government should introduce more flexible rules to “keep pace with rapidly evolving technology and use cases” of digital assets.

Earlier this year, Governor Newsom issued an executive order on cryptocurrencies, aimed at establishing a bridge between California businesses and blockchain technology.

Saying “No” to strict regulation

Several months ago, the California Assembly introduced a proposed crypto regulatory bill AB 2269, called “Digital financial asset businesses: Regulation.”

If approved by the relevant officials, the legislation would prohibit individuals or businesses in the region from engaging in digital assets without obtaining a mandatory license from the California Department of Financial Protection and Innovation (DFAI). In addition, the agency will require firms to retain all local client activity for at least five years.

However, Governor Gavin Newsom (known as an advocate for the blockchain industry) vetoed the proposed bill. In his view, such legislation would be a “costly undertaking,” and the government would need a general fund loan of “tens of millions of dollars” to enforce the rules.

He outlined that the digital asset sector has become increasingly popular in California, and as such, the upcoming regulations should not stop the “rapidly developing technology.” He then vowed to work with US officials and implement crypto-friendly regulations in the region in the near future:

“I am committed to working with the Legislature to achieve appropriate regulatory clarity as federal regulations come into sharper focus for digital financial assets, while ensuring that California remains a competitive place for companies to invest and innovate.”

Newsom wants California to become a crypto hub

In May of this year, the politician introduced an executive order on digital assets, which laid out a road map for regulatory and consumer protection and examined how blockchain technology could be incorporated into California’s business sector. Speaking on the move, Dee Dee Myers – Senior Advisor to Governor Newsom:

“Of the 800 blockchain companies in North America, about a quarter of them are in California, dramatically more than any other state. We’ve heard from so many that they want to be here, and we want to help them do it on a responsible way.”

Noting the huge potential of the crypto industry, Newsom’s order also aimed to make California a global center for blockchain technology.

– The possibilities are almost endless. We can do things like remove middlemen from transactions involving real estate or even cars. We can use it to protect people’s identities and provide benefits to people through public services,” Myers said.