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New California law will require licenses for cryptocurrency exchanges and will support stablecoins issued by banks.

 

The "BitLincese" bill is currently awaiting California Governor Gavin Newsom's approval and signature.

 

New California law will require licenses for cryptocurrency exchanges and will support stablecoins issued by banks.


A new crypto-focused measure may be introduced by the California state government to make the legal framework surrounding the industry more clear. This law, known as "BitLincese," requires cryptocurrency exchanges to apply for and get operational licenses in the state. The legislation would also mandate that stablecoin issuers hold a bank charter. According to the most recent "Worldwide Crypto Readiness Report" by Foresx Suggest, the United States is currently the second-most crypto-friendly country in the world, behind Hong Kong.

 

The law is currently awaiting California Governor Gavin Newsom's approval and signing.

 

"The licensing elements of the bill are intended to impose the same kind of onerous licensing and reporting framework that has stifled the development of the cryptocurrency industry and restricted access to secure and dependable crypto products and services in New York. The Blockchain Association, an industry trade group, detailed the Californian law in a Twitter thread. "In addition, it would make it impossible for many stablecoin issuers to operate within the state to generate significant economic activity and bring countless jobs to the state," it added.

 

According to a Coindesk story, Newsom has until September 30 to approve or veto the legislation.

 

A similar bill to control the cryptocurrency industry in its jurisdiction was also approved by the state of New York earlier in 2015.

 

According to Assembly Member Timothy Grayson (D-Concord), the bill's sponsor, "While the novelty of cryptocurrencies is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else."

 

Although the US has not yet passed rules governing the cryptocurrency industry, the country's law enforcement agencies are actively working to protect the crypto community from unanticipated financial hazards.

 

For instance, the US Federal Reserve provided new instructions for banks thinking about engaging in cryptocurrency-related operations back in August, emphasizing that businesses must contact the Fed beforehand and ensure that anything they do is legal.

 

In the supervisory letter, the Fed advised banks it regulates to take a number of precautions before engaging in any crypto-related activity, such as confirming that any proposed activities were lawful and that any necessary filings were required.

 

 


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