The US state of California has passed a bill aimed at regulating companies in the crypto industry.
The California State Assembly, one of the 50 states that make up the United States, the world's leading power, has approved the Bill AB-2269, on the regulation of digital financial asset businesses.
The bill was introduced by Assemblyman Tim Grayson with the purpose of regulating the cryptocurrency industry in the state and the companies that are part of it. This regulatory project Addresses legal loopholes and establishes regulations to recognize cryptocurrencies and their industry.
Now that the State Assembly has given the green light to this bill, it is up to Governor Gavin Newsom, known for maintaining a friendly stance towards cryptocurrencies, to approve or veto this regulatory project altogether.
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A BitLicense for cryptocurrencies in California
One of the main issues addressed by Bill AB-2269 is the issuance of licenses for cryptocurrency businesses in the state.
Thus, if this law were to be approved, it would come into force as of January 2025 and would force companies or entities that participate in commercial activities with cryptocurrencies to have a license issued by the Department of Financial Protection and Innovation of the state for its activity to be considered legal. In this way, the state of California would be creating a licensing framework that will be similar to the one existing in the state of New York, which regulates cryptocurrency companies through the BitLicense.
On the other hand, the bill in question grants the concept of "digital financial asset" the definition of: a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and is not legal tender, whether or not denominated in legal tender, except as specified.
Protecting Cryptocurrency Investors
Bill AB-2269 aligns with the guidelines issued in the executive order which Governor Gavin Newsom signed in May of this year, aims to regulate cryptocurrencies and stimulate the development of new technologies and Web3 to drive innovation at the state level.
Assemblyman Newsom, who is also the chairman of the state Assembly's Banking and Finance Committee, said that “California is ready to forge a path toward responsible innovation.” While Newsom supports cryptocurrency innovation and has called it “exciting,” he also recognizes the need to create a clear and robust regulatory framework that will allow for protect investors and ensure responsible and healthy development of the industry.
On his Twitter account, the assemblyman commented that the bill AB-2269 on the regulation of digital asset businesses has received great support from the Assembly.
While state lawmakers have warned investors about the risks of crypto assets, primarily due to the volatility of these digital assets in the market, Assemblyman Newsom has said that overall, the Assembly is focused on crafting smart and balanced policy to regulate cryptocurrencies.
On the other hand, the crypto community is awaiting the approval of this bill to add the state of California to the growing list of crypto-friendly states and regions in the country and around the world.
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