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Gov. Newsom of California vetoes the proposed crypto license and regulatory framework.

Photo by Maarten van den Heuvel / Unsplash

Gavin Newsom, the governor of California, rejected a bill that would have established a licensing and regulatory framework for digital assets, which added to the regulatory challenges already faced by the crypto ecosystems.

Assembly Bill 2269 was created with the intention of enabling the legal operation of cryptocurrency enterprises in California. On September 1, the California State Assembly passed the bill with no floor debate and forwarded it to the governor's office for approval.

Newsom opposed the notion and proposed a "more flexible plan" that would evolve over time while taking consumer safety and related costs into consideration, 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.”

According to the governor, the bill's current shape would necessitate borrowing "tens of millions of dollars" from the general fund of the state.

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

Newsom emphasized that before collaborating with the Legislature to create crypto licensing efforts, he has to wait for federal rules to "come into greater focus for digital financial assets."