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While New York is about to publish the final version of its BitLicense, the California regulator abandons its plans to regulate digital currency at the moment.

The California Department of Business Oversight (CDBO) has decided against any regulation of digital currency under the existing rules. Instead it will adapt a wait-and-see attitude and ask the legislature to take up the issue, Bloomberg reports.

Tom Dresslar, the spokesman for the agency, said:

“It remains to be seen whether Bitcoin and the virtual currency industry will fulfil the growth prospects forecast by backers. Prudence dictates we take a deliberate approach and let the market further develop. That will better ensure any regulatory regime California ultimately adopts works effectively for consumers, businesses and the market.”

Last December, the CDBO ruled it had legal authority over bitcoin and other digital currencies, which was seen as the first step towards bitcoin regulation. This January, while commenting on the launch of Coinbase exchange the agency said it had not yet decided whether to regulate virtual currency transactions under the state’s Money Transmission Act. In March 2015, a member of the California State Assembly, Matt Dababneh proposed a bill on virtual currency as an addition to the Money Transmission Act. The bill suggests that any virtual currency business should be regulated under the same law and licensed by the same regulator under the same conditions.

Bitcoin has had a status of “alternative currency” in California since January 2015. The bill AB129 specifies that bitcoin is not under any ban of issuance or circulation and, therefore, is legal for payments and transactions. It does not, however, establish an obligation to accept bitcoin as legal tender. This makes California one of the most profitable states for bitcoin businesses. 

 

Nadya Krasnushkina