The California State Assembly passed a bill for crypto regulation that would be implemented for crypto exchanges operating in their jurisdiction. The Digital Financial Assets Law bill was passed on Tuesday, August 30, 2022. The bill was then forwarded to the hands of Gavin Newsom, the State Governor, who can either exercise it in motion else can completely prohibit it.
The Digital Financial Assets Law bill mentions that digital asset exchanges and the companies in the crypto domain should acquire a license to operate in the state. The operating license has to be approved by California’s Department of Financial Protection and Innovation. Moreover, it also noted that any activity or operation outside the said license would be strictly prohibited. The bill is expected to be in effect from January 1, 2025.
The official release concerning the bill talked about the powers of the that:
“This bill would authorize the department to take an enforcement measure against a licensee or person that is not a licensee but is engaging in digital financial asset business activity with, or on behalf of, a resident in any of certain instances, including the licensee or person materially violates the provisions of the bill, a rule adopted or order issued under the bill, or a law of this state other than the bill that applies to digital financial asset business activity of the violator with, or on behalf of, a resident. The bill would prescribe certain civil penalties for violations of its provisions.”
California Crypto Regulation Bill: Who Proposed And Why?
Assemblyman Timothy Grayson, the one who proposed the bill earlier said that he understood the hype around crypto and other digital assets and in the same line said that:
“I’m impressed by the market’s ability to help consumers feel empowered to make financial investments and participate in a system that has, in many cases, felt closed off to them.”
Then he went on to say that the domain is new, fresh, and advanced, therefore, it does need proper regulation else the entire crypto framework would collapse. He then noted how the bill would be helpful saying:
“This bill will provide consumers basic but necessary protections and will promote a healthy cryptocurrency market by making it safer for everyone.”
It would be intriguing to see how this California crypto bill fares and manages the risks in the domain.