California Governor Gavin Newsom has signed into law a measure that will increase regulatory oversight of cryptocurrencies and strengthen data privacy protections for state residents.
The Digital Financial Assets Law aims to establish basic regulations for crypto companies operating in California by making them obtain DFPI license and meet specific requirements relating to reserves, disclosures, and audits. The law will go into effect on July 1, 2025.
The law also covers asset-backed cryptocurrencies like USDC and USDT, making it mandatory for them to keep complete reserves. Additionally, it is made clear that companies failing to adhere to the bill will be subject to enforcement measures.
The bill was passed after a year, when Governor Gavin Newsom vetoed a prior version of the crypto bill, stating that California needed a more flexible approach.
While these regulations will enhance transparency and reduce fraudulent activities, they might also pose challenges for the crypto industry and data brokers.
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