The Governor of California vetoes a bill establishing a licensing framework for crypto companies
The Governor of California, Gavin Newsom, has rejected a measure that would have required crypto firms in the state to get licenses.
The state assembly and senate approved the measure supported by Democrat Assemblyman Tim Grayson last month. The Digital Financial Assets Law will provide a framework for the cryptocurrency industry.
In a letter to the California State Assembly, Newsom remarked, “It is too soon to lock down a licensing system.”
In February of this year, the measure was first to read on the floor of the California State Assembly. On August 30, both the state senate and state assembly ultimately approved it. However, Newsom believes it is unnecessary, noting the expense of a new regulatory regime.
Newsom said that this law “would need an initial borrowing from the general budget in the tens of millions of dollars. Such a substantial commitment of general fund resources must be accounted for in the yearly budgeting process.”
Before committing to a license requirement with the legislature, Newsom also said that federal laws on digital financial assets must be more definite.
However, it may be some time before the government completely controls the cryptocurrency industry. Federal agencies and White House departments have lately published a variety of papers on crypto mining and CBDCs, among other elements of digital assets.
Some publications based on President Biden’s executive order have been criticized by industry professionals. These concerns centre on the lack of clarity in several of these reports.
The lack of licensing requirements in California, despite the state’s crypto-friendliness, leaves regulatory ambiguity in the Golden State.
In contrast to New York, which has a rigid license requirement, digital assets companies in California will continue to have more freedom.