Crypto insiders feel they’ve been burned before in the cauldron of New York’s BitLicense, but they suggest that California’s implementation leaves some room for hope.
With the U.S. Congress and federal regulators mostly absent from efforts to build a new system of rules for digital assets, the states have stepped in to set down some standards, but until now New York was credited with the most wide-reaching law to govern crypto. California is more than a year away from implementing its version, but the industry has noticed the state’s willingness to sit down and talk with crypto experts.
“Others states could take a cue from California’s collaboration with industry to produce law and regulation,” said Kristopher Klaich, deputy policy director at the Chamber of Digital Commerce.
California Governor Gavin Newsom, who had vetoed a similar bill last year, signed Assembly Bill 39 last week, which he said will give the Department of Financial Protection and Innovation (DFPI) “robust” regulation and enforcement power over crypto. Newsom also signaled the state will be open to more tinkering when he said that “ambiguity of certain terms and the scope of this bill will require further refinement” before its target date in 18 months.
“It’s clear much more work needs to be done to increase clarity for future licensees and narrow the statute’s scope,” said Peter Herzog, head of state policy for the Crypto Council for Innovation. “We’re grateful that Governor Newsom recognized this reality in his signing statement.”
“The bill has come a long way since last session’s veto of its predecessor,” Herzog added.
New law
The new law sets up the DFPI as the gatekeeper for digital asset activities, and licensed crypto firms would be subject to examinations, record keeping and fee disclosures to customers.
If it were a country, California by itself would easily be in the top ten global economies, far outpacing New York, according to economic data from the Federal Reserve Bank of St. Louis. But New York got out way ahead on crypto regulation. The difference – from the perspective of an industry that’s highly critical of…
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