Gavin Newsom, the Governor of California, has refused to accept a bill to regulate crypto. According to Gavin, cryptocurrency regulation requires a more flexible approach.
The governor vetoed many bills on Friday, including “The Assembly Bill 2269 (AB 2269)”. AB 2269 is a bill meant to establish Cryptocurrency’s regulatory and licensing framework. The title of the Bill was “Digital Financial Asset Businesses: Regulation. ” A California assembly member, Timothy Grayson, introduced the Bill early this year. The Bill passed in the California Senate on 29 August 2022. On 30 August, the Bill passed in the Assembly.
According to Gavin,
“AB 2269 would establish a licensing and regulatory framework, administered by the Department of Financial Protection and Innovation, for digital financial asset activity.”Digital assets are becoming increasingly popular in our financial ecosystem, with more consumers buying and selling cryptocurrencies each year.”
Gavin Newsom went on further to reference the executive order he issued on 4 May 2022. The directive aims to create a consistent and transparent business environment for companies in Blockchain. Here is the direct quote,
“…to create a transparent and consistent business environment for companies operating in blockchain, including crypto assets and related financial technologies, that harmonizes federal and California laws, balances the benefits and risks to consumers, and incorporates California values, such as equity, inclusivity, and environmental protection.”
Is it a Premature Move to Regulate Cryptocurrency?
Gavin Newsom says that regulating Cryptocurrency is a premature move. This is because the decision exercises force and not freedom. Investors should come to a consensus and agree to regulate Cryptocurrency themselves. The governor says that his administration has conducted extensive research and has come to a conclusion that,
“It is premature to lock a licensing structure in statute without considering … forthcoming federal actions.”
Other industry advocates have risen in support of Governor Gavin Newsom. While opposing the Bill, the Blockchain Association said,
“the bill creates shortsighted and unhelpful restrictions that would impede crypto innovators’ ability to operate and push many out of the state.”
According to the organization, the Bill might install erroneous licensing that might stunt the growth of Cryptocurrency. It might also hinder access to reliable and safe cryptocurrency products.
Is Gavin Newsom Right? Should States Regulate Cryptocurrency?
A recent article stated that cryptocurrency regulation protects China’s crypto investors. Even though the government forbids trading cryptocurrency, it still protects users from’ hodling.’ This is because crypto is a digital asset too. The high rates of Cryptocurrency fraud and money laundering are pushing governments into cryptocurrency regulation.
However, this forced regulation might stunt the growth of the cryptocurrency markets. Even though governments are looking to protect their citizens from bankruptcy, there is a better way. Governor Gavin Newsom is partly right because issues arise too when investors lose all cash in unstable crypto projects and depend on the state for providence.
