A bill that aims to authorize and oversee the operations of cryptocurrency exchanges was sponsored by the Consumer Federation of California (CFC), a nonprofit advocacy group campaigning for consumer rights.
Assembly member Timothy Grayson sponsored the Digital Financial Assets Law, a bill requiring governmental control of cryptocurrency enterprises, in an effort to shield Californians from financial hardship and promote responsible innovation. According to Grayson, the next logical step for the cryptocurrency industry is licensing, and he continues:
“And it is equally clear that until we take that step, Californians will continue to be vulnerable to prevalent and preventable financial scams.”
This is the CFC's second attempt to license and oversee bitcoin and digital asset businesses. Gavin Newsom, the governor of California, vetoed the bill (AB 39) when it was initially introduced in 2022.
If passed, AB 39 will license crypto companies under the California Department of Financial Protection and Innovation, ensuring regulatory clarity and investor protection. If passed, the bill will become law on Jan. 1, 2025, prohibiting citizens from engaging with cryptocurrency businesses until "certain criteria are met."
While explaining the purpose of the action, CFC executive director Robert Herrell added:
“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”
The CFC anticipates that the Assembly will take up this bill's first hearing in April.
The California Department of Motor Vehicles (DMV) is testing the digitization of automobile titles and title transfers via a private Tezos blockchain while Californian politicians work to enact crypto legislation.
According to Ajay Gupta, the California DMV's chief digital officer, the organization hopes to resolve the shadow ledger within the next three months.