Contrary to popular belief, it seems like California is not going to become the second state after New York City to implement a BitLicense regulatory framework in the foreseeable future.
According to recent reports, it seems like the lawmaker who introduced the AB 1326 digital currency law to the California Assembly, Matt Dababneh, has decided shelve the law following several conversations with digital currency experts and companies. With this in mind, the law will not be voted on this year, as more time is reportedly needed in order to study the measure, its possible outcomes and long-term effects.
To put things better into perspective, the main point of the law was to require digital currency companies to obtain a license prior to being allowed to operate, similar to the BitLicense law in NYC. In a recent statement, Dababneh mentioned that: Unfortunately, the current bill in print does not meet the objectives to create a lasting regulatory framework that protects consumers and allows this industry to thrive in our state. (…) More time is needed and these conversations must continue in order for California to be at the forefront of this effort.
The main reason why the Californian state is considering the idea of adopting a regulatory framework for cryptocurrency companies is to offer more protection to customers, in case their bitcoin is lost, or there are not treated fairly by the companies in question.
Dababneh continued by saying that the IRS has addressed the tax status of digital currencies, whereas federal regulators have already issued some guidance for virtual currency businesses, considering the fact that customers are not truly protected against possible harm.
It’s worth pointing out that the bill was not put into the voting process for several reasons. Firstly, many of the bill opponents mentioned that the vague language used in drafting the bill could affect business, while also reducing the county’s possibility of supporting bitcoin-based startups. In fact, some members of the community believe that this year’s version of the draft is even worse when compared to the initial one. In return, this could subject bitcoin companies to legislative hurdles and massive beaurocracy.
Dababneh believes that digital currency businesses do have their place in California, yet minimum standards and protections need to be put into place, to avoid other issues later down the road. He continued by stating that: “I look forward to continuing this discussion with stakeholders in January”.
Members of the digital currency in California, but also from other regions of the world are curious to see what changes the next version of the bill will present. Hopefully, it will be more lenient towards bitcoin startups, and those who wish to accept bitcoin as forms of payment in California.
Based on everything that has been outlined so far, what do you personally think about California getting its own ‘BitLicense’? Let us know your thoughts in the comment section below.