Recently, the California DFPI announced, and requested comment on, proposed modifications to regulations implementing the Digital Financial Assets Law (DFAL) and the California Money Transmission Act (MTA). The revised proposal followed an initial version of proposed regulations released by the DFPI in April.

This revised proposal responded to comments and expanded exemptions to the MTA for DFAL licensees, specifying that entities licensed under the DFAL would not be required to obtain a separate money transmission license for activities such as transmitting payments for the purchase or exchange of digital financial assets, transmitting the proceeds thereof, or issuing or selling “stored value” used “exclusively for the purchase, sale, or exchange of digital financial assets.” The proposed regulations also introduced an exemption for DFAL licensees engaging in money transmission in California, provided their “average daily outstanding money transmission liability” does not exceed $50,000 per month and they comply with Chapter 5 of the MTA.

Apart from these licensing clarifications, the proposed modifications included renumbering and definitional changes, among other technical amendments. Comments on the proposed modifications were due by October 15.