Gavin Newsom, the Governor of California, vetoed a statewide bill that was aimed at creating a framework for crypto regulation and this move has crypto proponents cheering.
The governor sent a memo on Friday in which he provided details of the veto. He stated that the bill in question was premature and added that they needed a more flexible approach because blockchain technology is evolving.
The governor opted to veto Assembly Bill 2269, even though it had received a lot of support in the legislature. It had 0 ‘no’ votes and 71 ‘yes’ votes, while there were nine abstentions.
Had the governor chosen to sign it into law, it would have meant that all crypto companies operating in California would have to get a state-approved license for conducting their activities.
Newsom also added that he had decided to veto because the cost of implementing the bill was significant.
He stated that with the passage of time, they would require a loan of tens of millions of dollars for AB2269.
Furthermore, Newsom also prefers to wait until the federal government clarifies its stance on crypto regulation and the results of the Executive Order issued in May on crypto are presented.
The Executive Order
Executive Order N-9-22 had been signed earlier this year by Newsom, under which his administration was to conduct research into crypto and for establishing a transparent regulatory framework for the industry in the state.
According to Newsom, locking in a licensing structure would be premature because the federal government has not clarified its stance and the results of this executive order are not in as yet.
He is also not the only one who had some concerns about the bill in question. A pro-crypto technology policy coalition, the Chamber of Progress, also had issues with some parts of the bill.
Chamber of Progress
The partners of the Chamber of Progress include names like Meta, FTX US, Circle, Apple and Amazon. Back in June, it had asked for several revisions to be made to the crypto bill.
These changes had been made in the final draft of the bill. A new memo had then been issued by the Chamber of Congress in which it approved the bill’s latest version, which still had a few more revisions pending.
The bill did not warn the state to impose a ban on licenses for algorithmic stablecoins and asked for clarification about the cryptocurrencies that would come under the Department of Financial Protection and Innovation.
But, Adam Kovacevich, the chief executive of the Chamber of Progress, was also pleased with the decision of the governor to veto the bill.
The CEO said that this would give the legislature the opportunity to take a more inclusive and less hurried approach to come up with crypto regulations that promote innovation and offer consumer protections.
He added that California and others states had a big opportunity to get crypto regulation done right in the next few years.
Lawyer Hailey Lennon was also pleased with the news and said it was good for the crypto industry.