California Governor Approves Stricter Crypto Regulations for 2025

Beginning in July 2025, California Governor Gavin Newsom has approved a bill imposing stricter regulations on businesses undertaking cryptocurrency operations.

In a statement released on October 13, Newsom stated that the bill, titled the Digital Financial Assets Law, would require individuals and businesses to obtain a license from the Department of Financial Protection and Innovation (DFPI) before engaging in digital asset business activities.

California Governor Gavin Newsom signing message, October 13. Source: CA.gov

In legislative documents, it makes reference to California’s money transmission laws, which forbid banking and transfer operations without a license from the DFPI commissioner.

Nonetheless, the new crypto law will permit the DFPI to impose stringent audit requirements on crypto firms and compel them to comply with recording requirements.

The statement clarified that companies that do not comply with the legislation will face enforcement measures. In 2022, around this time, Newsom refused to execute a bill that would have established a licensing and regulatory framework for digital assets in California.

“[This bill] would require a licensee to maintain […] for 5 years after the date of the activity, certain records, including a general ledger maintained at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.”

Despite the bill’s unanimous passage through the California State Assembly, Newsom stated that he would return it “without my signature.” Newsom suggested that the bill was insufficiently adaptable to rapidly evolving cryptographic trends.

Newson stated at the time that he was awaiting the implementation of federal regulations before working with the legislature to establish crypto licensing initiatives.

In the meantime, it was recently reported that the United States is considering applying the Electronic Fund Transfer Act to cryptocurrencies to combat fraudulent transfers.

In a recent speech, Rohit Chopra, the director of the Consumer Financial Protection Bureau, stated that he intends to grant permission for this to “reduce the harm of errors, hacks, and unauthorized transfers.”