Skip to content
Home » California has passed a law to regulate Bitcoin and cryptocurrencies

California has passed a law to regulate Bitcoin and cryptocurrencies

Important facts:
  • Companies in the industry must obtain a license to operate in the state.

  • California Governor Gavin Newsom advocates for a balance between protection and innovation.

California Governor Gavin Newsom approved a draft regulation on Bitcoin (BTC) and cryptocurrencies, called Digital Financial Assets Actwhich would come into force in June 2025.

In one releaseThe US official noted that the bill requires the Department of Financial Protection and Innovation (DFPI) to create a robust regulatory framework. including licensing and enforcement authority for certain cryptocurrency activities.

“The bill gives DFPI regulatory authority and an 18-month implementation period to ensure that the adopted regulatory framework can be carefully tailored to reflect industry trends and mitigate harm to consumers,” the governor states.

Newsom warns that there are “ambiguities in certain terms” so the bill “requires further refinement.” to provide clarity to consumers, regulators and businesses subject to this new legal framework. It is important for the governor to find a balance between protecting consumers and encouraging innovation.

What does the new law propose?

Within the The invoice A “digital financial asset” is defined as a digital representation of value used as a medium of exchange, unit of account, or store of value. It is also made clear that although it can be recognized by the state, it is not legal tender.

The text also notes that the regulations would authorize the DFPI to conduct inspections of individuals licensed to operate in California and “require a licensee to conduct all commercial activities in digital financial assets with or on behalf of a resident for a period of time.” of five years from the date of the activity,” it says.

Politician and former California Senate candidate Timothy Ursich Jr. assured that the bill approved by Governor Newsom “has raised concerns among some cryptocurrency companies about possible cost increases and product bans.”

According to Ursich Jr., this is a cause for concern The bill requires full reserves for stablecoinswhich could potentially “ban algorithmic stablecoins.”

Opponents of the bill have openly highlighted the need for exchange regulation for centralized exchanges (CEX) as well as setting development requirements for decentralized exchanges (DEX) in the future “to avoid making or not making mistakes in coding” that “make can”. the (DEX) exchange vulnerable to hacker attacks,” he added.

So far this year, several regulatory developments regarding Bitcoin have occurred in some states in the US. In April of this year, CriptoNoticias reported that the state of Arkansas in the United States approved the bill to protect Bitcoin mining and cryptocurrencies in this region. This means that mining can be carried out legally as it is a law in this southern state of the North American country.

Leave a Reply

Your email address will not be published. Required fields are marked *