Despite its reputation as a global leader in technology and never having met an industry it didn’t like to regulate (shout out to the carpet tax) California has remained relatively silent on blockchain and cryptocurrency.
In 2015, former Assemblymember Matt Dababneh proposed AB 1326- aka California’s BitLicense. The bill never passed out of the Senate, and failed once again in 2016. California’s blockchain and cryptocurrency business community continued to grow while New York suffered the “Great Bitcoin Exodus” and has struggled to issue 6 licenses in the intervening 3 years since the NY BitLicense first went into effect.
In 2017 Dababneh once again tried to introduce regulation- this time with the Virtual Currency Act which would have prohibited a person from engaging with virtual currency unless licensed. This bill also died, and it’s author has since resigned amid allegations of sexual misconduct.
Thus far the only regulation California HAS passed that mentions blockchain or cryptocurrency is a bill declaring “a raffle ticket shall not be sold in exchange for Bitcoin or any other cryptocurrency.” Noted.
In a year when Wyoming has become the breakout crypto-regulatory star by passing a set of 5 bills to attract investment, California’s forays are getting a little less press but are still signifcant. Two legislators have emerged with thoughtful pieces of legislation that start the process of the state regulating new technology by simply recognizing it.
AB 2658 by Assemblymember Ian Calderon defines blockchain technology and updates the Uniform Electronic Transactions Act to include it. This bill also creates a working group (with industry representation) to create the best possible regulatory framework for the state of California.
SB 838 by Sen. Robert Hertzberg also defines blockchain technology enables companies to record stock issuance and transfers using this technology.
The Blockchain Advocacy Coalition has organized entrepreneurs to testify at committee hearings and help shape the technical definitions within the bills. Both bills have passed out of their house of origin and have a reasonable shot of ending up on the Governor’s desk this summer.
Why does this matter? The state has successfully avoided industry-killing early overregulation. Legislators have demonstrated an interest in working with members of the blockchain community to learn what will work and are making small but smart steps towards a regulatory framework that makes companies more comfortable operating in the state.
The Blockchain Advocacy Coalition is organizing a legislative education day in Sacramento on Wednesday, June 20th. We will be meeting with over 30 legislators to explain how blockchain technology is used by businesses in California and why these two bills are a step in the right direction. We are hosting an info session/training happy hour for those interested in going to Sacramento on Wednesday June 13th at 7pm. Reach out to Ally Medina at firstname.lastname@example.org if you are interested in joining.