California Governor Gavin Newsom has approved a cryptocurrency bill that enforces stricter regulations on businesses conducting crypto operations, set to start in 18 months.
In a statement published on October 13, Newsom declared that the bill titled the ‘Digital Financial Assets Law,’ will make it mandatory for each individuals and firms to acquire a Department of Financial Protection and Innovation (DFPI) license to interact in digital asset business activities.
The bill is scheduled to come back into effect on July 1, 2025.
In laws documents, it draws a comparison to California’s money transmission laws, which prohibit banking and transfer services from operating with no license granted by the DFPI Commissioner.
However, the brand new crypto bill will allow the DFPI to impose stringent audit requirements on crypto firms in addition to force them to uphold recording requirements. The statement noted:
“[This bill] would require a licensee to take care of […] for five years after the date of the activity, certain records, including a general ledger maintained at the least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.”
It further clarifies that firms not complying with the bill will face enforcement measures.
Around this time last yr, Newsom declined to sign an analogous bill that aimed to determine a licensing and regulatory framework for digital assets in California.
Although the bill passed through the California State Assembly without opposition, Newsom expressed that he was sending the bill back “without my signature.”
Newsom suggested that the bill wasn’t flexible enough to maintain up with fast-changing crypto trends.
At the time, Newson stated that he was waiting for federal regulations to come back into place before working with the legislature to determine crypto licensing initiatives.
Meanwhile, Cointelegraph recently reported that the U.S. is exploring the potential for applying the Electronic Fund Transfer Act (ETFA) to crypto as a measure to combat fraudulent transfers.
In a recent speech, Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), expressed his intention to grant authorization for this to “reduce harm of errors, hacks and unauthorized transfers.”