Digital Advocacy Groups Critical of California Bitcoin Regulation

While members of the bitcoin and blockchain industry have been vocal in their praise for proposed regulation in California, more broadly focused digital advocacy groups are taking a surprisingly critical stance.

In the latest bill analysis on AB-1326, filed on 13th July, the Electronic Frontier Foundation (EFF) and Copia Institute entered opposition arguments, a position that places them at odds with bitcoin advocacy firm Coin Center, which has called the newest version "vastly better" in interviews and published materials.

The EFF's response, portions of which are now public via the state's website, suggests that the non-profit digital rights group believes the bill to be "premature" and "technically inaccurate". Founded in 1990, the group was an early supporter of bitcoin as a technology, accepting it for payments and supporting students who have faced legal issues as a result of industry-focused experimentations.

The EFF's filing reads:

“Virtual currencies are still developing, and this bill threatens to both stunt the growth of this innovative industry and hamper the enthusiasm driving consumer interest. Also, privacy and free speech are central issues in the virtual currency space, which the bill fails to adequately consider.”

Digital think tank Copia Institute was perhaps more broad in its criticism, arguing that the bill made little sense given the need for innovators to create without boundaries.

"We should be exceptionally careful when implementing rules that have the potential to shape – or strangle – the very roots of innovation," the Redwood City-based firm wrote. "New York, for instance, has already established BitLicense regulation, chilling bitcoin innovation in the state that is the financial center of the world."

The comments notably follow more positive remarks by some of the industry's best-funded startups including BitGo, Blockstream, Chain and Xapo that lauded the bill even while suggesting it should provide more leniencies for early-stage firms.

The bill passed a final hearing in the Banking and Financial Institutions Committee today by a vote of 7-0, and now moves to the Committee on Public Safety for further deliberation.

Source: CoinDesk
Jul 16, 2015, 10:02 AM
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