SACRAMENTO, Calif.—The Consumer Federation of California (CFC) is sponsoring a bill in California’s General Assembly that seeks to establish a new licensing regime for digital currency service providers operating in the state.
The bill was introduced on the House floor by Assemblymember Timothy Grayson. Aimed at preventing losses for Californian digital asset investors, the Digital Financial Assets Law will require virtual currency companies to seek a license with the California Department of Financial Protection and Innovation (DFPI), CoinGeek reported.
“It’s clear that licensure is the next natural step for this industry,” Grayson said in a statement. “And it is equally clear that until we take that step, Californians will continue to be vulnerable to prevalent and preventable financial scams.”
According to the CoinGeek report, the bill is CFC’s second attempt at launching a licensing regime for the virtual currency industry following the vetoing of the first bill by Gov. Gavin Newsom. In a press statement, the CFC said the proposed legislation makes “several salient modifications regarding the powers of the DFPI while making the financial regulator’s ability clear and transparent,” CoinGeek said.
‘Remains Optimistic’
The bill is expected to have its first hearing in April, and if it passes its legislative hurdles it will come into effect on Jan. 1, 2025.
“With the support of the Senate Democratic Caucus Chair and Chair of the Senate Committee on Banking and Financial Institutions, the CFC remains optimistic that the bill will not suffer the same fate as its predecessor,” CoinGeek said.
“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,” said Robert Herrel, CFC’s executive director.
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