Gavin Newsom, governor of California, has introduced legislative changes in the state regarding cryptocurrencies. According to the media reports, the politician has approved a new bill to regulate virtual currencies in the region.
Digital Financial Asset Act
He signed Assembly Bill 39 and created the Digital Financial Asset Act. This bill is considered an important step towards laying a foundation legal framework for digital currencies in the state.
The law is said to go into effect from 1st July 2025. This bill will grant immunity to the Department of Financial Protection and Innovation (DFPI) to enable the creation of a robust regulatory framework.
These changes are going to include the standardization for licensing and enforcement of the legal authority regarding named cryptocurrencies. The deadline under the rule is extended to 18-months period for the creation of a legislative framework.
Government Regulations Will Bring Greater Protection for Investors
Talking about the issue at hand, Governor Gavin retained that the government department is opting to strike the balance between preserving innovation and harboring safety from scams and fraudulent activities.
Newsom also maintained that the bill will address the uncertainty regarding the lack of legislative clarity; and make further edits in the regulatory process and legislative coverage of the digital currency space.
The state of California has been working on introducing new rules on the virtual currency market. The matter was further expedited following the collapse of digital currency exchange FTX last year.
The third largest cryptocurrency exchange filed for a Chapter 11 Bankruptcy last year creating a bear market impact across the board. The issue was extenuated on account of the absence of any defined legislative base to allow federal regulators to contain the situation.
SEC will not Appeal Against Grayscale
The Securities and Exchange Commission (SEC) has opted to not appeal against the case of Grayscale. It is worth noting that Grayscale sued the federal agency for denying the approval of Bitcoin ETF. Subsequently, courts ruled in favor of Grayscale. Later, SEC confirmed that it will not contest the court ruling in the matter.
Legal experts on the matter have retained that Grayscale will start the negotiation process with SEC officials in the next two weeks. GBTC is now opting to convert its enterprise holdings into Bitcoin ETF.
The cryptocurrency community has been keen on the development of this matter. The decision can translate the development of virtual currency sector during the last decade.
On this account, the decision of SEC to withhold the ruling has strengthened the quest of the firm to process the Grayscale Bitcoin ETF. SEC’s response on the matter of GBTC approval is expected to arrive in the upcoming fortnight.
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