Californians holding cryptocurrency will now have government assistance in accounting for their assets thanks to the benevolence of their good governor, Gavin Newsom, who cares deeply about their financial well-being.
Via Coin Desk (emphasis added):
“California Governor Gavin Newsom signed a crypto licensing bill on Friday, set to take effect in July 2025.
Considered California’s answer to New York’s “BitLicense,” the Digital Financial Assets Law faced heavy industry criticism but was passed by the U.S. state’s Assembly in September 2022.
The law requires California’s Department of Financial Protection (DFPI) and Innovation to create a regulatory framework for crypto. The framework includes a licensing regime and gives the department enforcement and rulemaking authority over the sector. The DFPI also gets an 18-month implementation period to ensure “the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm,” the letter said.
This is a totally unnecessary and gratuitous power grab by the state. The entire point — and the entire utility — of Bitcoin as an alternative to fiat central bank currency is that it requires no regulation by the government or any other authority. It is, rather, self-governing — which clearly enrages the government ninnies who despise any tool that would limit their purported utility.
Via Samuel Elliott (emphasis added):
Satoshi Nakamoto published Bitcoin’s ‘proof of concept’ in 2008. Nakamoto notes therein that ‘commerce on the internet has come to rely almost exclusively on financial institutions serving as trusted third parties’. He argues that the need for a centralised intermediary creates inherent inefficiencies for the digital transfer of wealth. To address this inefficiency, an alternative system, built upon cryptographic proof rather than trust, was proposed, allowing for direct peer-to-peer transfers without the risk of double spending. Since then, Bitcoin has seen exponential growth among users who are sceptical of State interference and regulation in currency. There is no government, company, or bank in charge of the management of Bitcoin.
The public ledger that anyone can access tracks and records the movement of Bitcoin between public addresses. It is inherently immune to the kind of manipulation, for that reason and others, the currencies issued by central banks are.
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But the capacity for manipulation of the money supply is the entire point of maintaining the current fiat system, which is why Bitcoin is an existential threat if left to its own devices.
Here are the comments offered by Newsom upon signing the law.
I am signing Assembly Bill 39, which establishes the Digital Financial Assets Law. Beginning July 1, 2025, this bill requires the Department of Financial Protection and Innovation (DFPI) to create a robust regulatory framework, including licensure and enforcement authority, for certain crypto activities. Importantly, this bill appropriately provides DFPI with rulemaking authority and an 18-month implementation dote to ensure the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm. I thank the author for the effort to create a clear and comprehensive approach to regulating the digital assets market. Stronger consumer and investor protections will prevent fraud and ensure bod actors are held accountable. However, ambiguity of certain terms and the scope of this bill will require further refinement in both the regulatory process and in statute to provide clarity to both consumers, regulators and businesses subject to this new licensure framework. It is essential that we strike the appropriate balance between protecting consumers from harm and fostering a responsible innovation and I look forward to working with the author to achieve this.
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