California Governor Signs "BitLicense" Crypto Licensing Bill Into Law, Effective July 2025
California Governor Gavin Newsom approved a crypto licensing bill that is set to enforce a structural framework for businesses conducting operations in the crypto industry and is set to take effect in July 2025.
On Friday, October 14, Newsom declared that the bill, titled the Digital Financial Assets Law, will make it mandatory for both individuals and firms to obtain a Department of Financial Protection and Innovation (DFPI) license if they want to continue operating in California.
The recently signed law is considered California's answer to New York's "BitLicense," having faced heavy industry criticism but was passed by the US State Assembly in September 2022.
However, this regulation extends the state's existing money transmission laws, which presently prohibit banking and transfer services from operating without proper licensing from the DFPI commissioner.
The Digital Financial Assets Law takes it a step further by authorizing the DFPI to impose stringent audit requirements on cryptocurrency firms and obligating them to maintain comprehensive financial records.
Moreover, the DFPI has been given an 18-month implementation period to ensure that the adopted regulatory framework can be carefully tailored to address industry developments and, most importantly, to mitigate potential harm to consumers.
Specifically, the bill dictates that license holders must retain records for at least five years from the date of any activity. These records should include a detailed general ledger updated monthly, encompassing all assets, liabilities, capital, income, and expenses of the licensee.
Non-compliance with these requirements will lead to enforcement measures against the non-compliant firms.
Governor Gavin Newsom said in the letter,
"Am
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