Assemblymember Timothy Grayson introduced the Digital Financial Assets Law to protect Californians from financial hardship and foster responsible innovation.
The Consumer Federation of California (CFC), a nonprofit advocacy organization working for consumer rights, sponsored a bill that seeks to license and regulate the activities of cryptocurrency exchanges.
The legislation demanding regulatory oversight of crypto businesses — the Digital Financial Assets Law — was introduced by Assemblymember Timothy Grayson with the aim of protecting Californians from financial hardship and fostering responsible innovation. Grayson believes that licensure is the next natural step for the crypto industry, adding:
“And it is equally clear that until we take that step, Californians will continue to be vulnerable to prevalent and preventable financial scams.”
This marks the CFC’s second attempt to license and regulate digital assets and cryptocurrency companies. The bill (AB 39) was first introduced in 2022, but California Governor Gavin Newsom vetoed it.
If passed, the bill will become law on Jan. 1, 2025, prohibiting citizens from engaging with crypto businesses until “certain criteria are met.” AB 39 will license crypto companies under the California Department of Financial Protection and Innovation, ensuring regulatory clarity and investor protection.
“The bankruptcies and scams of the past year only bolster our collective interest in ensuring basic and foundational consumer protections in this marketplace, which has up to now looked like the Wild West in terms of ‘anything goes’ behavior by key players in the cryptocurrency industry,” added Robert Herrell, executive director of the CFC, while revealing the intent behind the move.
The CFC believes the first hearing of this bill in the Assembly will be taken up in April.
Related: California cannabis producer adopts blockchain to track its weed
While Californian politicians try to introduce crypto regulations, the California Department of Motor Vehicles (DMV) tests the digitization of car titles and title transfers via a private Tezos blockchain.
As Cointelegraph reported, the agency wants to have the shadow ledger ironed out within the next three months, according to the California DMV’s chief digital officer Ajay Gupta.