The California department responsible for the regulation of financial services will soon have more powers to supervise the cryptocurrency industry.
California Governor Gavin Newsom signed a bill into state law on Friday that will see the California Department of Business Oversight renamed 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.