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Governor Gavin Newsom of California has officially signed a new bill, marking a pivotal moment for the Golden State’s crypto landscape. This measure, which regulates California’s burgeoning cryptocurrency industry, has been met with enthusiasm by both supporters and skeptics of the digital asset space.
The cryptocurrency bill, which was passed by the California legislature in August, reportedly primarily requires cryptocurrency companies to obtain a license to operate within the state.
This legislation comes on the heels of growing concerns following the FTX market collapse last year and other market tumult. As federal action remains uncertain, California lawmakers have taken it upon themselves to establish a critical regulatory framework for the industry.
Governor Newsom has been a strong supporter of blockchain and crypto technologies. It is worth noting that this is not the first time that California has attempted to regulate the crypto industry. In a similar move last year, Governor Newsom killed a bill, citing concerns that it resembled New York’s BitLicense regulation, which is often criticized for its strict approach to cryptocurrency regulation.
California Cryptocurrency Law Implementation
The new rule will go into effect in January 2025, giving crypto companies time to respond to the legal changes. Notably, the law expands its regulatory scope to include stablecoins. Under this law, stablecoins must be issued by a bank or have a license from the California Department of Financial Protection and Innovation.
Additionally, the market value of the stablecoins will be calculated using US generally accepted accounting principles (GAAP). This regulatory step aims to guarantee the stability and security of these digital assets, protecting both issuers and users.
This new California law also clarifies which federal agency, the SEC or the Commodity Futures Trading Commission (CFTC), has the authority to regulate cryptocurrency businesses in the United States. This is an important step in defining the regulatory landscape for cryptocurrencies, which have become an important part of the global financial system.
