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The California assembly has passed a crypto regulating bill that now requires cryptocurrency-related businesses to gain a special license to offer services to users in California. The crypto bill is now in the final process of becoming law in California.
California Is Aiming For Crypto Regulation
On Monday, California Assembly member Timothy Grayson produced the bill, AB 2269, with support from the Consumer Federation of California with a 71-0 majority. The crypto bill will establish the Digital Financial Assets Law in California.
The Digital Financial Assets Law is known as California’s “BitLicense.” A simple pen stroke is left to create a full-fledged law in California. The bill now requires Governor Gavin Newsom, who has until 30 September to sign or veto the bill. California will become one of the first states to require crypto platforms to obtain a special license to offer services in the state.
What Does This Crypto Bill Say?
The crypto law will tighten crypto regulations and bring more transparency to the crypto industry in California. If the governor signs the bill, it will take effect from 1 January 2025. Companies of digital-asset exchanges will get license approval from the state’s Department of Financial Protection and Innovation.
The Department will also be allowed to enforce drastic actions against those who are unlicensed. A non-licensed corporation engaging in digital financial asset business activity will be charged a civil penalty of up to $100,000 daily. Furthermore, if a licensee breaks the rule, they will have to pay a fine of $200,000 for each day of violation.
Stablecoin issuers holding securities as a reserve must have a total amount of stablecoins not less than the amount of all outstanding stablecoins sold or issued in the United States.
Tim Grayson stated, “While the newness of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else.”
Regulators and governments are framing crypto space. Crypto bill provides the user with more closure looks of the crypto space. However, The California BitLicense now completely depends on the governor whether to sign it or not.