The Blockchain Association, a crypto lobbying group, expressed thrill with California Governor Gavin Newsom quashing a statewide bill that would have established a regulatory framework for cryptocurrency regulation. Newsom called Assembly Bill 2269 “premature”. He believes a more flexible approach was essential for the state as blockchain technology is still evolving.
If the law had been signed, crypto firms would have been required to acquire a state-approved license to operate in California. The governor also cited the substantial cost of implementing the bill – requiring a loan in the tens of millions of dollars for the state. Moreover, Newsom is waiting for the federal government’s stance on crypto regulation to be solidified. He had signed the Executive Order N-9-22 to research cryptocurrency and establish a transparent regulatory environment for it in California.
The Blockchain Association called the statewide bill “misguided”. It said the law threatened to choke innovation and stop California’s burgeoning crypto industry in its tracks. The association said that by vetoing this bill and remaining true to the spirit and intent of his Executive Order, California’s status as a crypto innovation leader remains a great example for the rest of the country.
Adam Kovacevich, Chamber of Progress CEO, said the California legislature now has a chance to take a less rushed, more inclusive approach to develop crypto regulations that protect consumers and allow for innovation. He believes there is a huge opportunity in the next few years for California and other states to get crypto regulation right. Hailey Lennon, an attorney, also applauded Newsom’s decision. She tweeted that AB2269 would have introduced a Bitlicense type digital asset license requirement for crypto companies with CA customers.
However, Assemblyman Tim Grayson expressed disagreement with Newsom’s decision. He argued that the cryptocurrency market is under-regulated at best and deliberately rigged against everyday consumers at worst. Grayson says a financial market cannot be considered healthy if there are no guardrails in place to protect consumers from scams and bad actors.