California State Kills Main Crypto Bill, Why?

One of the pressures in the crypto market is regulation. Many countries’ regulators are consistent in supporting the control and monitoring of crypto assets. These regulators always create laws to manage the industry and protect investors’ funds.

California and New York are taking the lead in global crypto regulations. For instance, crypto companies in New York currently operate under a law mandating them to get a “BitLicense” before offering virtual asset services. The law has become operational in the State, although the current mayor Eric Adams is not supportive of the law.

But apart from these top players, other States such as Arizona and Wyoming are also coming up with diverse crypto regulations.

California Bill For Crypto Businesses And Exchange

Another bill, like the BitLicense law, emerged in California. The “Digital Financial Assets Bill” will mandate exchanges and businesses in the industry to get a license from California regulators.

This bill had earlier passed the assembly with a 71-0 vote. It also gave the senate and now awaits the Governor, Gavin Newsom, to sign it by September 30. Unfortunately, but surprisingly, Newsom vetoed the bill.

The decision has surprised the regulators, but the crypto community is thrilled about it. Newsom wrote to the California State Assembly, stating that he would veto the bill. According to him, the crypto oversight bill is unsuitable for the State.

The Governor believes that the crypto industry is gaining more popularity by the day. As such, there should be a transparent law protecting the citizens of the State. To achieve that, Newsom mentioned that his administration had researched the crypto industry to uncover protective approaches for investors.

Therefore, signing a bill without cognizance of his research will be wrong. Also, he pointed out that the federal mid-term election is in the pipeline and should be completed first.

According to Newsom, the bill will draw tens of millions from the State’s general fund. This amount will be required in the cost-benefit analysis of the bill and will be accounted for during the State’s budgeting process.

So, he suggests that the regulators wait for now and develop a flexible approach to strike a balance between innovation and protection.

The Digital Asset Community Rejoices

Every regulation in the crypto industry affects operations in one way or another. That’s why the community applauds Newsom’s actions to keep the bill.

The Blockchain Association Jake Chervinsky applauded the Governor’s guts and strength in standing up to the State Assembly. Also, Miles Jennings from a16z praised Newsom for his support of Web3 in California.

Featured image from Pixabay, chart from TradingView.com