California Governor Gavin Newsom has approved legislation imposing stricter regulations on cryptocurrency companies in the state beginning in July 2025.
The Digital Financial Assets Law will require crypto firms to obtain licensing from the state’s Department of Financial Protection and Innovation. Companies will also face stringent auditing rules and be mandated to maintain thorough financial records.
Firms found non-compliant with the new regulations will be subject to enforcement actions when the law takes effect in 18 months. Last year, Newsom vetoed a similar regulatory crypto bill in California.
The move aligns with growing efforts to regulate cryptocurrencies at both the state and federal level. California aims to impose oversight before a formal federal crypto framework is in place.
By setting a 18 month timeline, the state is giving crypto companies time to prepare for the licensing and operational changes. But the industry could face headwinds if other states pass legislation on different timelines.
With the new bill, California cements itself as a leader in pioneering crypto regulation among U.S. states. The rules may provide a blueprint for other states looking to follow suit.
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