California authorities responsible for regulating the financial market will soon have a new tool at their disposal. They will be able to regulate cryptocurrencies. California Governor Gavin Newsom signed the necessary legislation.
Among other things, the law renames the California Department of Commerce Oversight to the Department of Financial Protection and Innovation. The standard governing cryptocurrencies will take effect on January 1, 2021. This will give the regulator new tools to influence the environment of cryptocurrency markets. Among other things, by give the authorities broader powers that they have so far only been able to exercise in the normal financial markets for standard financial assets.
Officials will be able to sanction unlicensed financial services or products. The legislation also lays down rules that will have to be followed by entities offering cryptocurrencies or digital currencies. Lawmakers are promising from the new rules to increase consumer protection from impending cryptocurrency practices. To this end, ninety new official posts will also be created, representing about a 13% increase in staff at the ministry.
