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California State Assembly Passes Crypto Regulation Bill That is Criticized by Industry Stakeholders

Coindesk  | Sam Reynolds | Sep 1, 2022

Gavin Newsom  - California State Assembly Passes Crypto Regulation Bill That is Criticized by Industry StakeholdersCalifornia Gov. Gavin Newsom is set to sign a recently passed bill that would require digital asset exchanges and other crypto companies to obtain a license to operate in the state.

  • The Digital Financial Assets Law, dubbed California’s "BitLicense," takes after New York’s BitLicense regulation, which came into effect in 2015. California’s law, if signed by Newsom, a Democrat, would go into effect in January 2025.
  • Among the requirements is a prohibition, which would be phased out in 2028, on California-licensed entities dealing with stablecoins, unless that stablecoin is issued by a bank or is licensed by the California Department of Financial Protection and Innovation.
    • This is similar to a proposed (and never passed) bill in the U.S. Congress that would require stablecoin issuers to have a bank charter.

See:  California governor Newsom embraces blockchain and issues executive order on crypto

  • The bill would require stablecoin issuers that hold securities as a reserve to have an amount "not less than the aggregate amount of all of its outstanding stablecoins issued or sold in the United States.
    • aggregate market value must be computed using the generally accepted accounting principles (GAAP) of the United States.

The Blockchain Association, an industry trade group, tweeted :

[The bill would] create shortsighted and unhelpful restrictions that would impede crypto innovators’ ability to operate and push many out of the state.

This is the second attempt California has made to create a "BitLicense" regime. The first, in 2015, failed and was made dormant after opposition from a state senator.

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NCFA Jan 2018 resize - California State Assembly Passes Crypto Regulation Bill That is Criticized by Industry StakeholdersThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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