Newsom Vetoes ‘Premature’ Crypto Oversight Bill for California

The governor of California vetoed a bill that would have required financial service businesses to get a license.

The Digital Financial Assets Law, which was passed by the state assembly and senate, was not signed by the governor. While the governor said he shares the bill's intent to protect Californians from financial harm and provide clear rules for the industry, his administration has been researching and gathering input on the right approach.

It's premature to lock a licensing structure in statute without taking into account the work and federal actions. Ensuring regulatory oversight can keep up with rapidly evolving technology and use cases and tailored with the proper tools to address trends and mitigate consumer harm is a more flexible approach.

The bill requires a loan of tens of millions of dollars from the general fund during the first several years, a commitment that needs to be accounted for in the state's annual budget process.

The proposed legislation created shortsighted and unhelpful restrictions that would impede the ability to operate and push many out of the state according to the Blockchain Association.

The first of New York's BitLicenses for digital-asset activities was issued in 2015. New York City Mayor Eric Adams is a Democrat who wants to make New York a digital-asset hub.