California Crypto Oversight Bill Moves Closer to Becoming Law

A California bill that would require crypto financial-service businesses to get a special license is now closer to becoming law, with the Assembly voting to approve it Tuesday after the Senate gave it the nod a day earlier. It now heads to the desk of Governor Gavin Newsom, who has until Sept. 30 to sign or veto the bill.

If signed into law, the legislation -- called the  Digital Financial Assets Law -- would introduce tighter crypto regulations and more oversight for the industry in California. The bill, which would go into effect January 2025, would require companies like digital-asset exchanges to get licensed with the state’s Department of Financial Protection and Innovation.

Assembly member Timothy Grayson, a Democrat who introduced the legislation, said in a statement that the bill’s passage shows “the Legislature’s understanding that a healthy cryptocurrency market can only exist if simple guardrails are established.”

Some industry advocates have opposed the bill. The Blockchain Association, a crypto lobbying group, tweeted Monday that the proposed legislation “creates shortsighted and unhelpful restrictions that would impede crypto innovators’ ability to operate and push many out of the state.” 

New York similarly requires crypto businesses to get a “BitLicense” in order to conduct digital-asset activities in the state and issued the first of these license in 2015. However, the practice has been heavily criticized by some crypto enthusiasts, including New York City Mayor Eric Adams, a Democrat who has ambitions of making New York a digital-asset hub.