California Governor Approves Law to Regulate Cryptocurrencies

California Governor Gavin Newsom signed Assembly Bill 39 creating the Digital Financial Assets Act, a significant step towards establishing a regulatory framework for digital assets in the state.

The law will come into force from 1 July 2025 and will give the Department for Financial Protection and Innovation (DFPI) powers to develop a robust regulatory framework. This will include licensing and enforcement authority for certain cryptocurrency activities.

The bill gives DFPI rulemaking authority and an 18-month implementation deadline.

The following statements drew attention in the text in which Newsom announced his approval of the law:

“It is essential that we strike an appropriate balance between protecting consumers from dangers and fostering an environment of responsible innovation.”

However, Newsom also noted that the uncertainty of certain provisions and the scope of this bill will require further improvements in both the regulatory process and the statute.

California state legislators last year Bitcoin It had sought to impose new rules around cryptocurrency, an issue that has become more urgent following the collapse of exchange FTX and other market turmoil. Since there was no federal action yet, state regulators wanted to establish a basic regulatory framework.

*This is not investment advice.

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