California Moves to Regulate and Embrace Cryptocurrency
New Laws Establish Digital Financial Assets Law
Bill Signing Ceremony Held on October 13, 2023
On October 13, 2023, Governor Gavin Newsom signed Assembly Bill 39 and Senate Bill 401 into law, creating the Digital Financial Assets Law (DFAL). These laws represent a significant step towards regulating and embracing cryptocurrency in California.
The DFAL establishes a comprehensive framework for the regulation of digital financial assets, including cryptocurrencies and stablecoins. The law defines digital financial assets as "digital representations of value that are created, traded, or stored electronically and that are secured using cryptography." It also establishes a number of requirements for businesses that deal in digital financial assets, including licensing, recordkeeping, and consumer protection measures.
The signing of the DFAL comes as California seeks to become a hub for cryptocurrency innovation. The state already has a number of blockchain startups and cryptocurrency exchanges, and the DFAL is expected to attract even more businesses to the region.
The DFAL will go into effect on July 1, 2025. Businesses that deal in digital financial assets will have one year to comply with the law's requirements.
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