In the last step before registration, the Californian crypto regulation bill has been declined by the state governor.
California Governor Gavin Newsom has vetoed Assembly Bill 2269, called “Digital financial asset businesses: regulation.”
According to the official statement shared by the governor's office, Gavin Newsom stated that “a more flexible approach is needed” to release a bill that would evolve at the same speed as the technology and protect consumers.
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Assembly Bill 2269 aimed to make every crypto exchange receive California's Department of Financial Protection and Innovation approval before providing its services in the state.
On September 1st, the California State Assembly unanimously agreed on the bill and passed it to the governor.
Apart from the need to implement more flexibility to the bill, the governor has also cited the financial problems it would create.
Additionally, standing up a new regulatory program 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.
After vetoing the bill, Governor Gavin Newsom ended his statement by saying:
I am committed to working collaboratively with the Legislature to achieve the appropriate regulatory clarity once federal regulations come into sharper focus for digital financial assets, while ensuring California remains a competitive place for companies to invest and innovate.
Assembly Bill 2269 has been sponsored by Assemblymember Tim Grayson, who used Twitter to share his disappointment, adding that he would “continue to work to protect California's consumers.”
It is not the first time a crypto bill has been rejected in the last step before registration. On August 30th, the Paraguayan President vetoed a law that sought to regulate various cryptocurrency-related activities, including crypto mining, citing high electricity consumption.
In other news, on September 16th, POTUS Joe Biden's administration released a regulatory framework for cryptocurrencies.