Industry groups from Amazon to Uber oppose California Crypto Law
- California Governor Gavin Newsom may approve a new bill that would require cryptocurrency companies to obtain a license to operate in the state.
- Industry groups representing Amazon, Apple, Block, Coinbase, Genesis, Google, GrubHub, Lyft, Facebook/Meta, Uber and other companies wrote to the state assembly opposing the law.
- Nine organizations representing consumers and advocating for financial justice wrote to the state Assembly expressing support for the law.
California’s crypto regulation law will bring the state closer to overseeing crypto exchanges. In August, the California State Assembly passed the Digital Financial Assets Act, which would require cryptocurrency and digital asset exchange companies to obtain a license before being allowed to operate in the state.
The bill, which was sent to Governor Gavin Newsom on September 12 and still needs his signature, has faced opposition from cryptocurrency companies and interest groups. It is similar to New York’s “BitLicense” law, which took effect in 2015 and similarly requires crypto companies to obtain a state license.
California’s bill also states that stablecoins — or, cryptocurrencies whose price is tied to a real commodity — can only be issued by a bank, or licensed by the California Department of Financial Protection and Innovation.
Insider filed a public records request asking for a record of all the individuals and groups that contacted the California State Assembly about the law, which also follows Senate Bill or Assembly Bill 2269. The documents in response to the request show that 18 organizations and coalitions wrote to state representatives about the bill.
Several technology industry groups representing large corporations and venture capital firms filed to oppose the law. They represented companies such as Amazon, Apple, Block, Coinbase, Google, GrubHub, Lyft, Facebook/Meta and Uber. Several consumer and financial justice advocacy organizations wrote to the state assembly expressing support for the law.
Interest groups argued that regulation poses an “undue burden” on crypto companies
- Blockchain Advocacy Coalition
The Blockchain Advocacy Coalition wrote to Assemblyman Grayson on August 26. It said it opposed SB 2269 unless it was amended. It said the registration requirements for digital asset companies are “burdensome”, criticized the stablecoin ban and argued that the definition of “digital financial asset” in the bill is unclear.
- The Association for Electronic Transactions
The Electronic Transactions Association wrote to Assemblyman Tom Umberg on June 24 and Assemblyman Grayson on August 26, saying it opposed 2269 unless amended. It said the registration requirements are “far too onerous”, criticized the stablecoin ban and said the definition of “digital financial asset” in the bill presents “ambiguity”.
The Electronic Transactions Association has 339 member companies, including Afterpay, Amazon, American Express, Capital One, Chase, Google, JP Morgan Chase, Mastercard, PayPal, Stripe, Visa, Wells Fargo and Western Union.
- Blockchain Association
The Blockchain Association wrote to Assemblymember Grayson in an undated letter expressing its opposition to AB 2269. It criticized the stablecoin ban, saying the registration requirements were “deeply burdensome and unworkable” for many companies.
The Blockchain Association has 91 member companies, including Genesis, Consensys and US Bitcoin Corp.
- California Credit Union League
The California Credit Union League, which represents more than 230 credit unions, wrote to Assemblyman Grayson on July 13. It said it would support AB 2269 if it were amended to give credit unions the same exempt status given to banks. The current legal text currently has this exception.
- Chamber of Progress
The Chamber of Progress, a tech industry association with 31 member companies, wrote to Anthony Portantino, state senator and chairman of the Senate Appropriations Committee, on July 27 and Assemblyman Grayson on August 25. The association said it would support SB 2269 if amended. It argued that the registration requirements would hurt smaller companies, and called on the state to establish “crypto license reciprocity” with other states, such as New York, and to institute a “provisional license” for applicant companies.
Chamber of Progress member companies include Amazon, Apple, Google, GrubHub, Lyft, Facebook/Meta and Uber.
- Sunstone Trust Company
Sunstone Trust Company wrote to Assemblymember Grayson on June 21 saying it would support AB 2269 if it were amended to “include California-chartered trust companies, along with depository banks, as exempt from licensure” under the law.
- The round table for financial services
The Money Services Round Table, a consortium of leading “non-bank money transmitters,” wrote to Assemblyman Grayson on Aug. 19 expressing its opposition to AB 2269. It argued that licenses for digital asset companies should be issued under existing money transmitter licensees, arguing that the existing registration requirements would “create an unnecessary burden” for the companies.
The Money Services Round Table’s member organizations, according to the letter, include American Express, Western Union, MoneyGram, RIA Financial Services and Sigue Corporation.
Interest groups in support of the bill argued that it would protect consumers from fraudsters
The California Bankers Association wrote to Assemblymember Grayson on June 26 expressing its support for AB 2269. It said cryptocurrency companies have the potential to “expand consumer participation” in finance, but volatility poses “danger” and regulation can provide “safety and soundness . “
A few pro-consumer, pro-economic opportunity coalitions wrote to state assembly producers to express their support for AB 2269. They all said the lack of regulation has enabled a number of cryptocurrency scams and that the registration requirements and stablecoin restrictions would protect consumers and increase transparency of cryptocurrency transitions.
The Consumer Federation of California, California Association for Micro Enterprise Opportunity, California Reinvestment Coalition and Californians for Economic Justice wrote to Monique Limón, Chair of the Senate Banking and Financial Institutions Committee, on June 27 expressing their support for AB 2269.
The California Low Income Consumer Coalition joined the coalition listed above and all wrote to Senator Portantino on July 25 expressing their support. Subsequently, Consumers for Auto Reliability and Safety, the Sacramento Capitol Service Employees International Union, The Greenlighting Institute and the Older Women’s League joined this coalition in a joint letter of support to Assemblymember Grayson on August 26.
One group entered without commenting on the bill.
The Crypto Council for Innovation wrote to Assemblyman Tim Grayson, chairman of the state Assembly’s Banking and Finance Committee, on June 20, saying members are “reviewing the bill in detail and hope to provide meaningful feedback soon.” There was no follow-up correspondence to the public records request. Council members include Andreessen Horowitz, Block, Coinbase, Electric Capital, Fidelity Digital Assets, Gemini, Paradigm and Ribbit Capital.
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