The state of California has officially ceased further plans to adopt cryptocurrency legislation this year. The lawmakers attempting to create their own form of the New York BitLicense with Bill AB-1326. The legislation will remain untouched until next year, when authorities may revisit the Bill and try to introduce it again.
Also read: Bank Insider: Cryptofinance Will Not Be the End of Wall Street
California Lawmakers Stop Proposed ‘BitLicense,’ But Will Revisit Bill AB-1326 in January 2017
Cryptocurrency advocates working with lawmakers have vehemently opposed the latest trial of Bill AB-1326, which was introduced in 2015. The opposition most notably came from Jerry Brito’s Coin Center, among other Internet activists, such as the nonprofit group the Electronic Frontier Foundation (EFF).
Coin Center’s Executive Director Jerry Brito stated in a letter to bureaucrats that the Bill was “completely re-written” from previous iterations.
According to American Banker, Mark Farouk, from the California State Assembly’s Committee on Banking and Finance, said it definitely would be revisited next year.
“It is dead for this year,” Farouk stated. “We couldn’t find consensus to come up with the right solution by the end of this year’s legislative session.”
EFF said the Bill was “touted as model bill,” which couldn’t be further from the truth. Back in 2015, when the Bill was introduced, the EFF teamed up with 17 organizations who opposed the legislation. This included Fight for the Future, the Internet Archive, the Free Software Foundation, Blockstream, Gem, Bitwage, Purse.io, and Automattic, the company behind WordPress.com.
Some of the issues surrounding the Bill were a lack of clarification and the possibility of stifling innovation. For instance, Bill AB -1326 required participants to pay an up-front $5,000 USD application fee and $2,500 annually, which many people believed would be harmful to smaller startups. Additionally, the policy asked for extensive background information for applicants that was deemed intrusive by several organizations. If companies failed to work within the policy’s rules, fines of up to $25,000 would be imposed.
Say no to the California BitLicense bill AB-1326 https://t.co/Hk1gIFmkXg https://t.co/wX2gjBnpkg
— K.M. Gallagher (@ageis) August 11, 2016
Jerry Brito said the latest installment of the Bill did not explain how companies enrolled in the program would be exempt from money transmission licensing.
“We would expect the creation of a new ‘enrollment program’ would take the place of money transmission licensing, thus providing clarity. If it does not, then it is difficult to see what is the purpose of this bill,” Brito stated.
However, Farouk explained that the Bill will be revisited as early as January 2017, saying that “a lot of things [are] going to be modified.”
The Bitcoin community was very pleased to hear that the Bill had been dropped for 2016, as a vast majority of them were against the proposed legislation. Quite a bit of people who support the Bitcoin environment hope the Bill disappears for good, but thi most likely won’t be the case. Farouk said that next year’s revisions will look to the “model virtual currency Bill” created by the Uniform Law Commission.
Cryptocurrency proponents will have to cross their fingers again and hope lawmakers don’t try and stifle innovation again in the world’s eighth largest economy.
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Images courtesy of EFF, Twitter, Pixabay.