A cryptocurrency measure that will begin to enforce harsher regulations on companies performing crypto operations in July 2025 has been adopted by California Governor Gavin Newsom. According to a statement released by Newsom on October 13 and dubbed the Digital Financial Assets Law, it will be necessary for both individuals and businesses to get a Department of Financial Protection and Innovation (DFPI) license in order to engage in business activities involving digital assets.
A reference to California’s money transmission rules, which forbid the operation of banking and transfer services without a license issued by the DFPI commissioner, is made in legislative documents. The DFPI will be able to impose strict audit requirements on crypto enterprises and oblige them to adhere to recordkeeping standards thanks to the new crypto statute, nevertheless.
“[This bill] would require a licensee to maintain […] for 5 years after the date of the activity, certain records, including a general ledger maintained at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.”The statement noted.
It further states that businesses who disregard the law will be subject to enforcement actions. A similar bill that sought to create a licensing and regulatory framework for digital assets in California was rejected by Newsom about this time in 2022. Despite the fact that there was no resistance to the bill during its passage through the California State Assembly, Newsom stated that he was returning it “without my signature.”
The law, according to Newsom, wasn’t adaptable enough to keep up with rapidly evolving cryptocurrency trends. When asked at the time if he was working with the legislature to create crypto licensing schemes, Newson said he was waiting for federal regulations to be put in place. As a countermeasure to fraudulent transfers, it was revealed that the United States is looking into the prospect of extending the Electronic Fund Transfer Act to cryptocurrency. Director of the Consumer Financial Protection Bureau Rohit Chopra recently stated in a speech that he intended to authorize this in order to “reduce harm of errors, hacks, and unauthorized transfers.”