California Passes Crypto Bill Requiring Bank-Issued Stablecoins, and Business Owners Aren’t Happy About it

Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
California Passes Crypto Bill Requiring Bank-Issued Stablecoins, and Business Owners Aren’t Happy About it

In a 71-0 vote, the California Assembly recently passed a bill that could have a lasting impact on the cryptocurrency market. Digital asset exchanges and other crypto companies will be required by the Digital Financial Assets legislation (DFAL) to have licenses in order to operate in the state—if Gov. Gavin Newsom signs it into law.

The DFAL, also known as AB-2269, empowers California's Department of Financial Protection and Innovation (DFPI) to grant crypto exchange operating licenses. It's similar to New York's BitLicense law, passed in 2015, which governs the actions of cryptocurrency exchanges like Coinbase or Robinhood.


One of the bill's key requirements is a short-term rule (set to phase out in 2028) that crypto businesses licensed in California won’t be allowed to traffic in stablecoins unless they are licensed as a bank or have a license from the DFPI. Companies that don’t acquire such a permit could be fined up to $100,000 a day until they do.

Issuers must also have real financial assets equal to “all of their outstanding stablecoins issued or sold in the United States.” The stablecoin section of the bill seems like it was crafted with recent events in mind; having such a measure might have mitigated the June 2022 collapse of the TerraUSD stablecoin.

TerraUSD was algorithmic, meaning it was supposed to maintain a stable price through a complicated algorithm in which smart contracts continually tweaked the token’s supply to keep a stable price, no matter the level of demand. If a stablecoin is backed by assets, they remain stable because they are pegged to actual reserves of an underlying asset, like the U.S. dollar or Euro.

This aspect of the bill sounds like a net positive, but as CoinDesk notes, some in the crypto industry aren’t too happy about the legislation. In a letter on its website directed at California legislators, the DC-based Blockchain Association said that “passage of A.B. 2269 would be detrimental to California’s efforts to support innovation in the crypto and Web3 ecosystem throughout the state.”

According to the Blockchain Association, the bill “would effectively outlaw all of the crypto businesses that are currently thriving in California unless they are able to navigate an onerous, uncertain, and likely expensive licensing regime.”

Marlo Richardson is an L.A.-based CEO and the founder of Business Bullish, a resource that educates California entrepreneurs in financial literacy and entrepreneurship. Richardson tells dot.LA that for a business owner like her, “it’s difficult to love any new regulation.”

“Most people that go into business for themselves are looking to have more control over their life, their money, their schedule,” Richardson says, and the “entire premise of being a business owner or entrepreneur is freedom. Crypto was created with that freedom in mind.”

Richardson says that something like the Digital Financial Assets legislation might “interfere” with business owners’ freedom to use crypto. She says it is “understandable that the government feels the need to keep a watchful eye on anything that could be a threat” to the economy, she thinks “there are other ways to accomplish that.”

Still, she seems resigned to the fact such legislation will go into effect, telling dot.LA that “we must deal with the unnecessary rules or face harsh penalties."

Gov. Newsom has until Sept. 30 to sign or veto the bill.

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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AmazeVR Wants You To Attend K-Pop Concerts Virtually

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

AmazeVR Wants You To Attend K-Pop Concerts Virtually
Photo courtesy of AmazeVR

Virtual reality startup AmazeVR now has $17 million to further expand its VR concert experience.

The West Hollywood-based company’s latest funding amounts to a bet that virtual shows, a staple of the pandemic, are here to stay. Mirae Asset Capital led the Series B funding round, with Mirae Asset Financial Group subsidiary (Mirae Asset Venture Investment), CJ Investment, Smilegate Investment, GS Futures and LG Technology Ventures investing again. Mobile game maker Krafton joined the group—but South Korean entertainment company CJ ENM’s stake reveals AmazeVR’s plans to expand into K-pop world.

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