California Governor Gavin Newsom Enacts Bill Establishing Regulatory Framework for Digital Assets

The governor of California has signed off on a bill that aims to create a new regulatory framework for digital assets.

Governor Gavin Newsom Signs Assembly Bill 39, Paving the Way for California's Digital Financial Assets Law

Governor Gavin Newsom has approved Assembly Bill 39, which introduces the Digital Financial Assets Law. This legislation mandates the Department of Financial Protection and Innovation (DFPI) in the state to establish a comprehensive regulatory framework, encompassing licensing and enforcement authority, for specific cryptocurrency activities.

Furthermore, the bill grants the DFPI the power to create rules for cryptocurrency regulation and sets an 18-month timeline for implementing the regulatory framework.

Governor Newsom commented, "The ambiguity surrounding certain terms and the scope of this bill will require further refinement both in the regulatory process and through legislative measures to offer clarity to consumers, regulators, and businesses that fall under this new licensure framework. Striking the right balance between safeguarding consumers from harm and fostering responsible innovation is crucial, and I anticipate collaborating with the bill's author to achieve this goal."

In May of the preceding year, Governor Newsom issued an executive order, urging lawmakers to develop a regulatory framework that encourages blockchain innovation while ensuring consumer protection. He noted that this order aligns with President Biden's executive order focused on cryptocurrencies, emphasizing the potential of blockchain technology for the benefit of the public.

Oct 17, 2023