The Governor of California, Gavin Newsom, has vetoed a crypto regulatory bill from the State parliament. The bill was going to mandate crypto exchanges and businesses to obtain a special operating license from the State Department of Financial Protection and Innovation.
Executive vs. Legislative Powers
The bill was successfully passed in the Assembly, with a vote count of 71 to 0, and in the State Senate too. But Governor Newsom who had a deadline of the 30th of September to give his signature rather vetoed it.
The proposed bill has a semblance with the New York law that requires crypto companies to get a license called BitLicense. Although the mayor of New York, Eric Adams, criticized the law and says it stops New York from being a hub for digital assets.
The California bill has the aim of creating better oversight and monitoring of the crypto space within the state.
Governor Newsom wrote a letter to the State Assembly where he pre-informed the legislators that he was going to veto the crypto bill. In the said letter, Newsom pointed out the popularity of crypto in the world and restated the need to have transparent laws that would protect all Californians.
Governor Newsom further stated that the current administration has gone ahead to carry out broad research on ways that would effectively protect citizens from any risk that might be connected with cryptocurrencies. However, the Governor said he thinks it is rather early to establish a licensing structure in the framework without giving his research enough consideration.
Importantly, the Governor made reference to the coming Federal mid-term elections. He communicated his belief in a more flexible way to bring the much-needed balance between innovation and protecting users.
The Governor equally pointed out the cost-benefit implications of the bill. For Newsom, the proposed bill was going to withdraw a loan in the tens of millions from the general fund of the California state. He said he believes if such an amount was going to be spent, it should be accounted for in the budget.
The crypto community has been ringing with praises to Newsom for his decision. Blockchain Association’s Jake Chervinsky appreciated the Governor for displaying such strength and the ability to stand. In the same way, Miles Jennings praised Newsom for the opportunity he gave to web3 in the state.