California Governor Gavin Newsom has approved a bill that introduces regulations for the cryptocurrency industry in the state. These regulations mandate that companies in the crypto sector must acquire a license to operate.
Governor Gavin Newsom of California signed a bill on Friday to regulate cryptocurrencies within the state. This bill was approved by California’s lawmakers on August 31, who felt it was necessary following issues in the crypto market, including the collapse of the FTX exchange last year.
The California legislature had passed this bill in August, aiming to regulate the cryptocurrency industry in the state. California is home to nearly 25% of blockchain and digital asset companies in North America. It’s worth noting that this was their second attempt, as a similar bill was vetoed by Governor Newsom last year.
Gavin Newsom, a prominent supporter of blockchain and crypto tech, had previously vetoed a similar bill because it resembled New York’s strict BitLicense regulation.
The new law is set to become effective in January 2025 and expands its regulations to cover stablecoins. To issue stablecoins in California, they must be managed by a bank or licensed by the California Department of Financial Protection and Innovation. The value of stablecoins will be determined using the US Generally Accepted Accounting Principles (GAAP).
Congress Developing Cryptocurrency Regulation Framework
The US Congress has presented multiple bills to regulate the cryptocurrency industry in the country. The crypto sector has criticized government and regulators for not providing clear guidelines, especially with the recent actions by the US SEC and other regulators. However, the progress of these crypto bills is being delayed by lawmakers.
These bills also aim to clarify whether the SEC or the CFTC holds the authority to regulate the cryptocurrency industry in the United States.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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