It may have taken a while, but California Governor Gavin Newsom has formally signed a controversial cryptocurrency bill into law as of Friday, October 13th.
In a letter released by the governor’s office, Newsom pointed out that the bill still needs to be tweaked in terms of the regulatory process it entails, as well as its statutes to prevent any ambiguity that could confuse businesses, consumers, and regulators alike. The governor also said to strike a balance between protecting consumers from any adverse issues and fostering a dynamic environment for innovation within the sector.
Modeled after the BitLicense bill proposed in New York state, California’s Digital Financial Assets Law has been given the gubernatorial nod and will take effect come July 2025.
Under the law, the state’s Department of Financial Protection and Innovation (DFPI) is now required to develop a regulatory framework for cryptocurrencies within its jurisdiction. This framework will essentially give the DFPI enforcement and regulatory authority over the sector in California. At the same time, the framework will include a licensing regime for cryptos.
This framework will need to be implemented within an eighteen-month period as a way of ensuring that it can be properly tailored to keep up with trends in the cryptocurrency sector and prevent any undue risk or harm to consumers.
While it was heavily disputed by crypto firms operating within the state, the Digital Financial Assets Law was initially passed by the California State Assembly in September of last year.
