The California department responsible for the regulation of financial services will soon have more powers to supervise the cryptocurrency industry.
- California Gov. Gavin Newsom signed a bill into law Friday to rename the California Department of Business Oversight as the Department of Financial Protection and Innovation.
- The bill (AB 1864), introduced by lead author Assemblywoman Monique Limón (D-Santa Barbara) on Jan. 7, will go into effect on Jan. 1, 2021.
- The changes will equip the regulator with "new tools to shape the regulation of virtual currency," the department's commissioner, Manuel P. Alvarez, told CoinDesk via email.
- The new California Consumer Financial Protection Law will, among other things, provide the department with greater enforcement powers designed to protect Californians from "pandemic-inspired scams," per a Friday press release.
- The move means the department will have new regulatory authority to begin cracking down on deceptive or abusive practices undertaken by unlicensed financial services or products.
- But the new law will also see the creation of an Office of Financial Technology Innovation designed to engage with new industries and consumer advocates to encourage consumer-friendly innovation and job creation within the state.
- In addition, a new Division of Consumer Financial Protection will be created to monitor markets, with a research arm that will keep up with emerging financial products such as cryptocurrencies.
- With the expansion of the department, 90 additional employees will be added to the government payroll representing a 13% increase in staffing.
- The legislation would allow his department to increase consumer protections without hamstringing "honest and fair operations," Alvarez said.