The Californian Assembly has passed a bill to regulate and add license crypto financial services based in the state. Per California Globe, the Crypto Financial Services Licensure Bill was passed with a 71-0 majority. It is up to Governor Gavin Newsom to either sign or vetoes the bill.
What the crypto regulation bill entails?
The bill, as such, will require anyone who engages in digital financial asset business activity to be licensed by the Department of Financial Protection and Innovation. In hindsight, the Department will also be allowed to take enforcement measures against those who are unlicensed.
So, if a non-licensee engages in digital financial asset business activity, they may get a civil penalty of up to $100,000 daily. Furthermore, if a licensee materially violates a provision of this division, $20,0000 will be the applicable penalty for each day of violation.
If passed, the bill would come into law on 1 January 2025. The bill, however, received resistance from several stalwarts and associations. The Blockchain Association, for instance, equated the said bill to New York’s BitLicense regulation and stated that its provisions would install the same type of “onerous licensing and reporting regime” that has “stunted” the growth of the crypto industry.
The stablecoin tangent
Alongside, it is worth noting that there’s another clause in the stablecoin section of the bill according to which stablecoin issuers that hold securities as a reserve are supposed to have an amount “not less than the aggregate amount of all of its outstanding stablecoins issued or sold in the United States.”
Furthermore, the bill specifies that the aggregate market value must be determined using the generally accepted accounting principles of the United States. Per the Blockchain Association,
“… it would make it impossible for many stablecoin issuers to operate within the state, a rapidly growing sector within the crypto industry set to generate significant economic activity and bring countless jobs to the state.”
Retrospectively, the association wanted the bill to get rejected. Despite the opposition, the Senate passed bills 31-6 with 3 abstentions. The next day, it was cleared in the Assembly 71-0 with 9 abstentions.
Footnote
Regulators around the world are shaping up the crypto regulatory landscape. A day back, for instance, the president of Paraguay rejected the crypto mining law. However, in Japan, the government is looking to ease rules, especially the ones related to tax.
Read More: Japanese regulators looking to ease Crypto tax rules