California Gov. Newsom vetoes crypto licensing and regulatory framework

Opposing Assembly Bill 2269, Newsom recommended a “more flexible approach” that would evolve over time while considering the safety of consumers and related costs.

Adding to the existing regulatory hurdles for the crypto ecosystems, California Governor Gavin Newsom refused to sign a bill that would establish a licensing and regulatory framework for digital assets.

Assembly Bill 2269 sought to allow the issuance of operational licenses for crypto companies in California. On Sept. 1, California State Assembly passed the bill with no opposition from the assembly floor and went on to the governor’s office for approval.

Opposing the notion, Newsom recommended a “more flexible approach” that would evolve over time while considering the safety of consumers and related costs, adding:

“It is premature to lock a licensing structure in statute without considering both this work (in-house efforts to create a transparent regulatory environment) and forthcoming federal actions.”

The governor stated that the bill, in its current form, would require loaning “tens of millions of dollars” from the state’s general fund:

“Such a significant commitment of general fund resources should be considered and accounted for in the annual budget process.”

Newsom highlighted that he waits for federal regulations to “come into sharper focus for digital financial assets” before working with the Legislature to establish crypto licensing initiatives.

Related: Biden’s anemic crypto framework offered us nothing new

The Office of Science and Technology Policy (OSTP) submitted an analysis to the White House regarding design choices for 18 central bank digital currency (CBDC) systems for the United States.

The technical evaluation for a U.S. CBDC system highlighted OSTP’s inclination toward building an off-ledger, hardware-protected system while considering the various trade-offs inherited by each design choice.