On October 13, Governor Gavin Newsom signed into law a comprehensive licensing regime for digital asset companies operating in California. Until this point, California had refrained from taking a definitive position on whether a broad swath of digital asset businesses required licensure under California’s existing money transmission law, contrary to the approach taken by most other states. Under the Digital Financial Assets Law, A.B. 39 (the “Law”), certain digital asset companies will now be barred from operating in California effective July 1, 2025, unless they hold a license from California’s Department of Financial Protection and Innovation (“DFPI”). The Law is California’s first comprehensive framework for regulating digital assets as well as the first state-level statutory crypto licensing framework in the U.S. to include specific provisions for stablecoins. The Law also comes amid an ongoing debate over the role of federal versus state oversight of an industry still reeling from a series of high-profile scandals and a long “crypto winter.”