California Governor Approves Crypto Regulation Bill for 2025
- California Governor Gavin Newsom approved a crypto regulation bill titled “Digital Financial Assets Law.”
- The bill is set to be in motion on July 1, 2025, and the DFPI has 8 months to implement the bill.
- The bill requires firms and individuals to get a DFPI license prior to engaging in crypto activities.
- The regulation also requires businesses to be subject to regulatory audits and maintain records.
The governor of California, Gavin Newsom, has greenlit a crypto bill that seeks to regulate the digital asset sector and businesses. The bill will take effect in 18 months and will impose stricter regulations on blockchain-based tokens and blockchain-based service providers. On the other hand, most states in the United States are planning to bring in some kind of regulation for digital assets.
According to a statement published earlier this week, the California governor said that the bill titled ‘Digital Financial Assets Law’ will make it necessary for firms and individuals to obtain a license from the Department of Financial Protection and Innovation (DFPI) to engage in activities involving digital assets. The bill is set to be in motion on July 1, 2025.
The California DFPI will be required to create a strict and robust framework that will include licensing and enforcement authority for the digital asset sector. The agency responsible for regulating financial services will be provided 18 months to implement the proposed framework, as per the statement signed by Newsom.
As per the legislation documents, the crypto regulation bill draws a comparison to the money transmission laws of California, which prohibit banking and transfer services from operating without a license granted by the DFPI Commissioner. Additionally, the new bill will also give the DFPI the power to impose strict audit requirements for crypto businesses to follow. The agency can also force these firms to uphold recording requirements.
“[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,” said the statement.
More importantly, the firms found not complying with the California DFPI will face enforcement measures. It is crucial to mention here that around this time in 2022, Newsom refused to sign a similar bill regulating crypto, which had passed the California State Assembly without opposition. He said that he was sending the bill back “without my signature” and recommended a “more flexible approach.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
