A coalition of nonprofit advocacy organizations and virtual currency companies published a letter today calling on the California legislature to reject A.B. 1326 unless important fixes were made to the bill. A.B. 1326 would create a license for virtual currency businesses in California.

The 17 organizations include nonprofit advocacy groups such as the Electronic Frontier Foundation, Fight for the Future, the Internet Archive, and the Free Software Foundation; Bitcoin startups like Bolt, Blockstream, Gem, Bitwage, and Purse.io; and Automattic, the company behind WordPress.com.

The coalition is asking the California legislature to hold off on adopting a virtual currency licensing scheme until adequate research has been done, critical flaws in the proposed legislation have been addressed, and experts in the virtual currency space have been given an opportunity to weigh in on the proposal. In lieu of a hastily drafted and far-reaching licensing program, the letter asks the legislature to simply clarify that California’s Money Transmission Act does not apply to virtual currency-only businesses.

While the coalition acknowledges the good intentions behind A.B. 1326, they also point to a number of serious concerns with the draft legislation, including technical inaccuracies in the bill, due process concerns for license applications, issues for small startups, and undue impact on video games. The bill has been drafted with only Bitcoin in mind, and it is particularly ill-suited for other virtual currencies and emerging technologies, such as smart contracts.

Right now, hobbyists, innovators, and startups are creating new and exciting uses of virtual currency services and providing value for California consumers. And over 40 mainstream financial services companies have recently started to explore how this technology can increase efficiency and improve financial security. Virtual currency technologies such as Bitcoin, Ripple, and Ethereum are likely to have a powerful impact on the future of technological innovation. It’s therefore vital that California—which has until now been a haven for this type of innovation—does not enact a law that could chill new creations in this space.

Read the letter in full below: