The California Department of Financial Protection and Innovation (DFPI) has released modifications to its proposed regulations under the Digital Financial Assets Law (DFAL), along with related amendments to the State’s Money Transmission Act (MTA). The updates follow public comments submitted earlier this year and are intended to provide clarity for businesses preparing to operate under the state’s new digital assets regulatory framework.
The DFAL itself, which takes effect July 1, 2026, will establish a comprehensive licensing regime for companies engaged in digital asset activities. By refining its proposed regulations now, the DFPI aims to ensure smoother implementation once the law goes into force. The latest proposal makes clear that duplicative oversight will be avoided. Activities such as transmitting or storing digital assets, money transmission tied to buying or selling digital assets, and stored value issued for those purposes will not also be regulated under the MTA. At the same time, the DFPI has incorporated liability thresholds from the MTA to preserve adequate supervisory authority.
Other revisions focus on definitions and compliance obligations. The definition of “control” now provides that a 10 percent ownership interest creates a rebuttable presumption of control, aligning the rule with statutory text and industry standards. Application and reporting requirements have also been clarified, including which personnel must be identified, how financial statements are to be submitted, and what types of changes must be reported to the Department.
By responding to industry feedback and eliminating overlap with the MTA, the DFPI’s revisions reflect a continued effort to balance consumer protection with regulatory efficiency as California prepares to roll out one of the nation’s most significant digital asset laws. These proposed regulations are not yet effective, and will only become enforceable once approved by the Office of Administrative Law and filed with the Secretary of State.
