California DFAL Licensing Deadline Set for July 1, 2026

Governor Newsom signed Assembly Bill 39 (AB 39) and Senate Bill 401 (SB 401) on October 13, 2023, together constituting the Digital Financial Assets Law (DFAL) (California Financial Code section 3100 et seq.). AB 1934, signed September 29, 2024, extended the license effective date from July 1, 2025 to July 1, 2026. Under Financial Code section 3103, persons who exchange, transfer, or store digital financial assets with or on behalf of California residents, or who issue digital financial assets redeemable for money, must hold a DFPI license. Exemptions include certain banks and persons with less than $50,000 in projected annual gross revenue from subject activity.

Exchanges, OTC desks, stablecoin issuers, custodians, and crypto-kiosk operators serving California residents must submit completed DFAL applications to the DFPI by July 1, 2026, to continue operations. Kiosk operators face additional obligations: by January 1, 2024, a $1,000-per-customer daily dispensing cap and receipt-provision requirements took effect; by January 1, 2025, transaction fee caps of $5 or 15% of the USD equivalent of digital assets transacted — whichever is greater — came into force under Financial Code section 3904. A DFAL license does not replace other California licenses (e.g., money transmission) that may be required.

Source: California DFPI, "Digital Financial Assets" page, https://dfpi.ca.gov/regulated-industries/digital-financial-assets/ (confirmed July 1, 2026 license date and exemptions); California DFPI, "Digital Financial Assets Law Frequently Asked Questions," https://dfpi.ca.gov/regulated-industries/digital-financial-assets/digital-financial-assets-law-frequently-asked-questions/ (confirmed application via NMLS, "early 2026" application release).

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