On July 1, 2025, California’s Department of Financial Protection and Innovation (“DFPI”) will impose licensing requirements for companies that handle digital financial assets, including cryptocurrencies. This is essentially California’s version of the New York DFS BitLicense, a license that PTI has held in good-standing since February 2022. In fact, the new California law allows for reciprocity for license applicants that have held a BitLicense prior to January 1, 2023.
Some of the new law’s provisions may seem onerous or overwhelming to digital asset marketplaces and other cryptocurrency exchanges that have operated freely in California to this point. However, as a licensed money transmitter in every other US state, the consumer protection and reporting provisions at the heart of the new law are considerations that PTI makes daily with respect to our customers across the United States. Our philosophy is that consumer protections enhance blockchain technology adoption by customers and platforms that have otherwise been discouraged to do so due to high profile fraud cases and regulatory ambiguity.
Of course, while the law clarifies California’s digital asset regulatory landscape, the enforcement aspects of the law remain murky. At PTI, we own and manage the regulated activity associated with our clients’ enterprises and it will be our job to assume that burden for our clients and ensure those protections for our customers.
We believe that compliance, security and transparency are essential elements for expanding and democratizing the utility of digital assets. We look forward to working with – and providing meaningful feedback to – the DFPI as we enter into this new era.