Electronic Frontier Foundation (EFF), a nonprofit organization established for the defense of civil liberties in the digital space, has convinced Assembly member Matt Dababneh to withdraw the controversial bill A.B. 1326 that has created unjustifiable and unsustainable set of regulations for cryptocurrency startups.
In essence, A.B. 1326 grants the governing body of California to decide which currencies and payment platforms can be legalized in the state. If passed, the bill would give the California authorities to oversee business operations and transactions of cryptocurrency startups, creating an impractical ecosystem in which digital currency-focused startups can’t operate in.
More importantly, the bill forces the government to decide the legitimacy of currencies and operations, taking well-deserved freedom from customers and users of digital currencies.
Experts suspected that the bill was a direct result of the California lawmakers’ shallow understanding of digital currencies and what they were built to be. The government failed to grasp the concept of cryptocurrencies and its benefits to users.
For instance, the regulatory framework within the bill proposed the regulation of digital currency transactions as well as businesses, recording and evaluating each transaction initiated by cryptocurrency users. That means, Bitcoin users are subjected to various regulations for merely sending a transaction to another user.
EFF and its team of activists, attorneys, and technologists believed that the bill did not serve its purpose to assist and guide digital currency startups and their users through further development. Instead, it created a set of untenable laws that are virtually impossible to comply with.
“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,” said EFF.
Marking this event as a milestone, EFF will continue to protect digital currency startups and fight against unlawful regulations that are creating negative precedent for everyone in the industry.
“EFF continues to believe that before lawmakers anywhere consider legislation regulating digital currencies, they need to better understand the technology at issue as well as demonstrating how the legislation actually benefits consumers. The California bill unfortunately failed in both respects,” the EFF added.
With the continuous support from EFF, digital currency startups and cryptocurrency users will be able to correct the wrongful approach from state lawmakers.