Crypto Currently: California Enacts Landmark Crypto Licensing Law

I. Introduction

On October 13, Governor Gavin Newsom signed into law a comprehensive licensing regime for digital asset companies operating in California. Until this point, California had refrained from taking a definitive position on whether a broad swath of digital asset businesses required licensure under California's existing money transmission law, contrary to the approach taken by most other states.¹ Under the Digital Financial Assets Law, A.B. 39 (the Law), certain digital asset companies will now be barred from operating in California effective July 1, 2025, unless they hold a license from California's Department of Financial Protection and Innovation (DFPI). The Law is California's first comprehensive framework for regulating digital assets as well as the first state-level statutory crypto licensing framework in the United States to include specific provisions for stablecoins. The Law also comes amid an ongoing debate over the role of federal versus state