California will now be able to form a robust policy for crypto. All thanks to Governor Gavin Newsom who has given the green light to the groundbreaking “Digital Financial Assets Law.” It is set to take effect on July 1, 2025.
Individuals and firms will be required to obtain a Department of Financial Protection and Innovation (DFPI) license under the new law. The license will enable registered parties to participate in digital activities. The law mirror’s state’s money transmission laws.
How will the new law work?
The bill will allow DFPI to enforce audit requirements and compel firms to maintain records for a period of five years. The Governor made it clear that non-compliance wasn’t an option for crypto firms. He ensured that strict enforcement measures will be in place.
The success of this bill marks a remarkable shift in the Golden State’s stance on crypto regulation. In contrast, Newsom rejected a similar bill last year
This represents a remarkable shift in California’s stance on crypto regulation, as just a year ago, Newsom declined a similar bill, expressing concerns that it didn’t adapt to the fast-paced crypto landscape.
Newsom wants to establish California’s crypto laws as soon as possible. He doesn’t want to wait until federal regulations to form.
He wants to make California a hub for crypto businesses and the Digital Financial Assets Law is a testament to its commitment. It will ensure that the laws are in line with the rapidly evolving landscape of the crypto space.
California’s DAO law
April 2023 witnessed California’s proactive approach in embracing the future of blockchain technology and Decentralized Autonomous Organizations (DAOs). San Francisco Assembly member Matt Haney introduced the Assembly Bill 1229.
The bill will provide clarity and legitimacy for DAOs by allowing them to register in the state and pay taxes. It will also offer enhanced protection for Californians involved in the Web3 scene. Influential figures like of Andreessen Horowitz and the Crypto Council for Innovation have expressed support for the bill.