California Governor Gavin Newsom has signed into law a groundbreaking cryptocurrency bill known as the ‘Digital Financial Assets Act’, which will impose stricter regulations on businesses involved in cryptocurrency operations in the state. The law, which is scheduled to come into force on July 1, 2025, is set to bring significant changes to the crypto world in California. Here are the details…
Critical cryptocurrency regulation attracted attention
A critical step came from California Governor Newsom. Newson signed off on a bill. The main provision of the bill is aimed at both individuals and companies engaged in cryptocurrencies-related activities. It requires these individuals or companies to obtain a license from the Department for Financial Protection and Innovation (DFPI). This move is similar to existing licensing requirements for money transmission services. It aims to increase transparency and security in the cryptocurrency industry.
One of the most striking aspects of the Digital Financial Assets Law is enforcement and enforcement. Specifically, it gives the DFPI the authority to impose strict auditing standards and registration requirements on cryptocurrency firms. As stated in regulatory documents, licensees must keep detailed records for at least five years, including a monthly general ledger that comprehensively lists assets, liabilities, capital, income and expenses. This measure is designed to increase compliance in the sector.
There is no room for tolerance
The new law leaves no room for leniency, creating clear consequences for businesses that do not comply with the prescribed requirements. Non-compliant firms will face enforcement measures, demonstrating that California is taking a proactive stance to ensure the integrity of the cryptoasset industry within its borders. This development comes as a significant change from Governor Newsom’s previous stance on cryptocurrency regulation. Nearly a year ago, Newsom refused to sign a similar bill aimed at creating a regulatory framework for cryptocurrencies in California. He also expressed concerns about its flexibility to adapt to the rapidly changing crypto landscape.
At the time, he was not working with the legislature on crypto licensing initiatives. Before that, he had expressed a desire to wait for federal regulations. Against the backdrop of these state-level efforts, the United States as a whole is exploring the application of the Electronic Funds Transfer Act (ETFA) to the cryptocurrency space as a tool to combat fraudulent transfers. Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), recently pointed out his mistakes in the crypto industry. He also highlighted the potential to reduce hacks and unauthorized transfers. So he signaled his intention to authorize this move. The approval of the ‘Digital Financial Assets Act’ marks a significant milestone in California’s approach to crypto regulation.
To be informed about the latest developments, follow us Twitter’in, Facebookin and InstagramFollow on . Telegram And YouTube Join our channel.