California Governor Gavin Newsom has signed the Digital Financial Asset Law, setting the stage for regulating the cryptocurrency industry in the state.
The law designates the Department of Financial Protection and Innovation (DFPI) as the regulatory authority responsible for licensing and overseeing specific crypto activities. It also grants the DFPI rulemaking powers and provides an 18-month implementation period to adapt to industry changes and enhance consumer protection.
The goal is to strike a balance between consumer protection and fostering innovation, although the law may need further refinement due to certain ambiguities.
The absence of clear and comprehensive cryptocurrency regulations in the United States remains a persistent challenge, despite ongoing calls for government intervention. While lawmakers have attempted to establish regulatory guidelines, a concrete framework has yet to emerge.
This regulatory uncertainty has resulted in legal disputes, exemplified by Coinbase’s petition against the SEC.
In response to the SEC’s allegations of security rule violations regarding its crypto products, Coinbase urged the regulator to create a well-defined regulatory framework for the cryptocurrency industry.
California’s recent pro-crypto efforts align with the ongoing lack of comprehensive crypto regulations in the U.S., which has prompted calls for regulatory clarity and driven some crypto companies to cease operations in the country.
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