California Governor Gavin Newsom refused to sign legislation that would have required cryptocurrency companies and individuals in the state to obtain a certain license to operate in the area. Instead, he argued that authorities should impose more flexible rules to “keep up with the rapidly evolving technology and use cases” of digital assets.
Earlier this year, Governor Newsom issued an executive order on cryptocurrencies, aiming to bridge the gap between California businesses and blockchain technology.
Say “No” to heavy regulation
Several months ago, the California Assembly introduced a proposed crypto regulation bill AB 2269, called “Digital Financial Asset Companies: Regulation.”
If approved by relevant officials, the legislation would prohibit individuals or business firms 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 would require companies to keep records of all local customer activity for at least five years.
However, Governor Gavin Newsom (known as a champion of the blockchain industry) vetoed the bill. According to him, such legislation would be an “expensive undertaking” and authorities would need a general fund loan in the “tens of millions of dollars” to enforce the rules.
He emphasized that the digital asset sector has become increasingly popular in California, and as such, the upcoming regulations should not stop the “rapidly evolving technology.” He later pledged to cooperate with US officials and implement crypto-friendly rules in the region in the near future:
“I am committed to working collaboratively with the Legislature to achieve appropriate regulatory clarity once federal regulations focus more on digital financial assets, while ensuring that California remains a competitive place for businesses 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 roadmap for regulatory and consumer protection and examined how blockchain technology could be incorporated into California’s business sector. Dee Dee Myers, senior adviser to Governor Newsom, spoke about the move:
“Of the 800 blockchain companies in North America, about a quarter are in California, far more than any other state. We’ve heard so many people want to be here, and we want to help them do it responsibly.” .
Given the huge potential of the crypto industry, Newsom’s order also aimed to make California a global hub for blockchain technology.
“The opportunities are almost endless. We can do things like remove the middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identities and provide benefits to people through government services,” Myers said.
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