California Governor Gavin Newsom has vetoed Bill 2269 proposed by State Congressman Tim Grayson on the grounds that a more flexible approach is needed to address crypto regulations.
The bill is originally billed to impress virtual currency service providers to obtain a license before they start operating in the state. The bill seeks to establish California as a state issuing BitLicense just like New York.
“It is premature to lock a licensing structure,” Newsom wrote in a recent letter to the California State Assembly. “A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases and is tailored with the proper tools to address trends and mitigate consumer harm.”
Governor Newsom was also concerned about the financial implications of putting the Bill to work, which he noted the state was not prepared for at this time.
According to him, introducing a new regulatory approach is “a costly undertaking, and this bill would require a loan from the general fund in the tens of millions of dollars for the first several years. Such a significant commitment of general fund resources should be considered and accounted for in the annual budget process.”
California is one of the most forward-thinking states in America for crypto-related advancements. With the rise in the level of adoption of digital currencies in the state, Gov Newsom warned crypto users of the high rate of scams in the ecosystem back in March 2020.
From issuing Executive Order to establish crypto regulations by Gov Newsom to introducing a crypto bill to measure the impact of digital assets on consumers. With the veto placed on Grayson’s Bill, the lawmakers will have to go back to the drawing board and take the advice of the governor, who is advocating for an alternative approach to handling crypto at this time.
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