California’s State Assembly has approved a bill calling for digital currency companies to be regulated in a similar way to banks.
Formulated by Assemblyman Matt Dababneh, chairman of California’s Banking and Finance Committee, bill AB-1326 was approved following a 55-22 vote in favour.
Currently undergoing review by California’s Senate – having already completed the first of three readings – if passed, the bill would require digital currency businesses to obtain an annually renewable license from the Department of Business Oversight (DBO), unless they are exempt from doing so by the agency.
As previously reported by CoinDesk, license applicants would incur a $5,000 non-refundable registration fee; would be required to complete an application which includes identifying any previous virtual currency services provided by the applicant.
According to California’s legislative process, if the bill is approved by the Senate, it will proceed to the state’s Governor who can either sign it into law, allow it to become law without a signature or veto it.
A vetoed bill can be overridden by a two thirds vote in both houses. If it does become law, most bills typically come into effect on the first day of January of the following year.
Regulatory pressure
The news comes amid increasing regulatory pressure from state legislators.
Just last month, North Carolina’s House of Representatives approved a bill calling for specific digital currency regulation. Similarly to California’s bill, House Bill 289 is currently undergoing review in North Carolina’s Senate.
Submitted by Republican Representative Stephen M. Ross, who also serves as a vice president and investment officer at Wells Fargo, the bill sets out to enact a new Money Transmitters Act (MTA) to specifically address the transmission of virtual currencies such as bitcoin.
California state assembly image via Felix Lipov / Shutterstock.com.