Today we joined other leading California bitcoin companies in submitting a letter to the California State Senate on pending digital currency legislation, AB 1326. The letter expresses our desire for California to set pro-technology policy for digital currency, and was sent from us together with Bitgo, Bitnet, Chain, Gem, Mirror, and Xapo.
California has been the home of much of the innovation in the digital currency sector. Collectively, digital currency companies in the state have raised hundreds of millions of dollars and created thousands of high paying jobs. We have an opportunity for California to provide an alternative to the overly burdensome BitLicense regulation recently implemented by New York.
A key topic at issue in any of the legislative debates underway in California and elsewhere is licensing. In systems like Bitcoin, which establish a trustless and decentralized infrastructure, licensing offers little upside in terms of consumer protection and security, yet imposes substantial costs and burdens on innovators. We strongly believe the California law should not require licensing of entities that don’t hold unilateral custody of digital currency. And even when an entity is a custodian of users’ digital currency, we see value in alternative policy approaches like safe harbors or the UK’s voluntary consumer protection standards in striking a balance between consumer safety and innovation.
At Blockstream, our focus is building and supporting core bitcoin infrastructure that remains permissionless and trustless with all of the security and privacy benefits that flow from that architecture. We hope to bring a perspective to the policy discussion that takes the underlying protocol and our technical expertise into account. We organized this effort with guidance from COPIA Institute and Coin Center, under the direction of Elizabeth Stark, a technology policy expert and open Internet advocate working with Blockstream as an advisor.
We’re appreciative that the staff working on AB 1326 have been very open to input as they’ve implemented positive, innovation-friendly changes to the bill. California will play a crucial role for the future of digital currency and blockchain innovation, and we’re pleased to join with leading bitcoin companies to reach out about this legislation and have our collective voice heard.
You can read the full text of the letter here:
California Bitcoin Companies letter to California State Senate on Virtual Currencies Bill AB 1326