California Governor Supports Clear Crypto Regulations, Agrees To The Digital Asset Law

The Governor of California gave the green light for crypto regulation. (Photo; Doc. Yellowblock)

JAKARTA Crypto regulation is the center of attention of the crypto community in the United States. The reason is, the country has not established a clear law regarding crypto assets, especially after US regulators, the US Securities and Exchange Commission, which are claimed to have arbitrarily taken action against crypto industry players.

However, new efforts were made by the Governor of California, Gavin Newsom, who has approved a new digital currency regulatory plan, with the aim of strengthening crypto business regulations. This regulation will take effect in July 2025.

Known as the Digital Financial Assets Act, this regulation will force individuals and companies involved in digital asset activities to obtain licenses from the Department of Financial and Innovation Protection (DFPI) if they wish to continue operating in California.

This rule is partly based on existing remittance laws in the state. The law currently prohibits banking services and transfers that operate without obtaining valid approval issued by the DFPI commissioner.

The Digital Financial Asset Law provides additional powers to DFPI to implement strict audit requirements for digital currency companies and requires them to store comprehensive financial records.

In this context, the law stipulates that license holders must keep records for at least five years after each activity. This note must include a detailed ledger that is updated every month, including all assets, obligations, capital, income, and license holder expenditures. Failure to comply with these requirements would result in law enforcement actions against companies that do not comply with regulations.

It is important to note that the approval of this crypto regulatory bill marks a significant change in the Newsom Governor's approach to this issue. In 2022, he rejected a similar bill citing the lack of flexibility needed to follow the rapid development in the crypto world.

At the time, he was more supportive of waiting for federal regulations before moving forward with crypto regulation at the state level. The federal government itself is considering various measures to increase security and surveillance in the cryptocurrency industry, including applying legislation relating to the transfer of electronic funds to cryptocurrencies.

While California is preparing to implement the Digital Financial Assets Act, its impact on the cryptocurrency industry in the state and whether this will pave the way for further regulations across the United States remains a concern.