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California is one step closer to joining New York in requiring
Governor Gavin Newsom has until September 30 to sign or veto the
Digital Financial Assets Law, which would go into effect in 2025.
The bill requires companies offering services that involve
investing, lending, or trading cryptocurrencies to register with
the state’s Department of Financial Protection and
Proponents of the bill call it balanced and claim it establishes
responsible guardrails to protect consumers, while detractors argue
it produces an onerous process that will drive crypto businesses
from the state – an important issue given that California is
home to some notable crypto players, including Coinbase and
Neither the licensure requirements nor the related concern and
criticism are new: New York’s BitLicense regime went into
effect in 2015 (the first such license was issued that year),
despite criticism of over-regulation and an unduly burdensome
application process. Indeed, some companies purportedly left and/or
limited their services in New York as a result of the law, though
New York’s Department of Financial Services has approved 31
credentials, including companies such as Robinhood, Block and
California’s struggle with digital asset regulation now
moves to the governor’s office. For now, the Governor has not
indicated what he plans to do with the bill, but his decision will
have meaningfully impact the digital asset industry, in particular
given California’s position as a tech hub.
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