Digital Financial Assets

Beginning July 1, 2026, companies must be licensed by the DFPI or have applied for a license with the DFPI to operate in California. The DFAL prohibits an entity from engaging in digital financial asset business activity unless the entity holds a license from the DFPI. Digital financial business activity includes activities such as exchanging, storing, or transferring a digital financial asset, such as a crypto asset. The new law promotes consumer and investor protection by creating a robust regulatory framework, including supervision and enforcement authority, for certain crypto activities.

Prospective Licensees

If you are a prospective DFAL licensee, or have a question about how the law affects your business, join our email list to receive future updates or email [email protected].

The Digital Financial Assets Law requires a digital financial asset transaction kiosk operator (“kiosk operator”) to comply with certain requirements in California.

Beginning January 1, 2024, a kiosk operator must provide the Department a list of all kiosk locations that an operator owns, operates, or manages in the state. An operator is defined as a person who owns, operates, or manages a digital financial asset transaction kiosk located in this state. Additionally, by January 1, 2024, an operator (1) may not dispense or accept more than $1,000 in a day to or from a customer via kiosks and (2) must provide a customer with a receipt with specified information for any transaction made at the operator’s kiosk.

Beginning January 1, 2025, kiosk operators must provide pre-transaction disclosures to customers and are prohibited from collecting from customers in any single transaction the greater of $5 or 15% of the U.S. dollar equivalent of digital financial assets involved in the transaction.  These dates remain operative for kiosk operators and were unchanged by AB 1934.

However, with the passage of AB 1934, operators must comply with the licensing requirements stated in the law by July 1, 2026. Learn more on the kiosk operators webpage.

The DFAL provides the DFPI with rulemaking authority to ensure the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm.

Second Invitation for Comments – Respond by November 18, 2024

On October 2, 2024 the DFPI invited public comments related to the DFAL license application, application fees, and other topics. The Commissioner invited interested parties to submit comments by November 18, 2024. Read the comments from 11 interested organizations.

First Invitation for Comments

The DFPI issued its first invitation for public comment on the Digital Financial Assets Law (DFAL) in late 2023 and received comments in January 2024 related to the DFAL license application, licensure requirements, and stablecoin approval. Read the comments from 18 interested organizations.

Crypto, which is frequently referred to as “decentralized” as there is no one central authority controlling the blockchain to which assets are tied, can be an extremely risky investment. Crypto generally lacks consumer protections that other financial assets come with. Since the Governor’s Office signed an executive order in 2022 to create a framework for regulating this new technology, DFPI has taken a growing role in overseeing the crypto landscape. Consumers who are interested in investing in Crypto should learn more and be aware of the risks and potential for fraud.

Here are some resources to get you started:

• Crypto Overview
• Scam Tracker
• Consumer alerts