Today's Law As Amended


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AB-1934 Digital financial asset businesses.(2023-2024)



As Amends the Law Today


SECTION 1.

 Section 3201 of the Financial Code is amended to read:

3201.
 On or after July 1, 2025, 2026,  a person shall not engage in digital financial asset business activity, or hold itself out as being able to engage in digital financial asset business activity, with or on behalf of a resident unless any of the following is true:
(a) The person is licensed in this state by the department under Section 3203.
(b) The person submits an application on or before July 1, 2025, 2026,  and is awaiting approval or denial of that application.
(c) The person is exempt from licensure under this division pursuant to Section 3103.

SEC. 2.

 Section 3303 of the Financial Code is amended to read:

3303.
 (a) A licensee shall maintain, for all digital financial asset business activity with, or on behalf of, a resident for five years after the date of the activity, a record of all of the following:
(1) Any transaction of the licensee with, or on behalf of, the resident or for the licensee’s account in this state, including all of the following:
(A) The identity of the resident.
(B) The form of the transaction.
(C) The amount, date, and payment instructions given by the resident.
(D) The account number, name, and United States Postal Service mailing address of the resident, and, to the extent feasible, other parties to the transaction.
(2) The aggregate number of transactions and aggregate value of transactions by the licensee with, or on behalf of, the resident and for the licensee’s account in this state expressed in United States dollar equivalent of digital financial assets for the previous 12 calendar months.
(3) Any transaction in which the licensee exchanged one form of digital financial asset for legal tender or another form of digital financial asset with, or on behalf of, the resident.
(4) A general ledger maintained at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.
(5) Any business call report the licensee is required to create or provide to the department.
(6) Bank statements and bank reconciliation records for the licensee and the name, account number, and United States Postal Service mailing address of any bank the licensee uses in the conduct of its digital financial asset business activity with, or on behalf of, the resident.
(7) A report of any dispute with the resident.
(8) If applicable, a report maintained at least monthly that demonstrates compliance with Section 3601.
(b) A licensee shall maintain records required by subdivision (a) in a form that enables the department to determine whether the licensee is in compliance with this division, any court order, and the laws of this state.
(c) If a licensee maintains records outside this state that pertain to transactions with, or on behalf of, a resident, the licensee shall make the records available to the department not later than three days after request, or, on a determination by the department, at a later time.
(d) All records maintained by a licensee are subject to inspection by the department.

SEC. 3.

 Section 3509 of the Financial Code is amended to read:

3509.
 The requirements imposed on a covered person or a covered exchange under this chapter shall be operative on July 1, 2025. 2026. 

SEC. 4.

 Section 3603 of the Financial Code is amended to read:

3603.
 (a) A  Notwithstanding subdivision (a) of Section 3601, a  covered person may exchange, transfer, or store a digital financial asset  stablecoin  or engage in digital financial asset administration,  administration of that stablecoin,  whether directly or through an agreement with a digital financial asset control services vendor, if that digital financial asset is a stablecoin  stablecoin is  approved by the commissioner pursuant to subdivision (b), provided that the covered person complies with any requirements, restrictions, or prohibitions established by the commissioner pursuant to subdivision (c).
(b) (1) The commissioner may approve a stablecoin for exchange, transfer, or storage by a covered person, or for issuance pursuant to digital financial asset administration, if the commissioner determines that the stablecoin does not compromise the interests of residents who may use the stablecoin as a payment for goods and services or as a store of value.
(2) In determining whether to make an approval under paragraph (1), the commissioner shall consider all of the following factors:
(A) Any legally enforceable rights provided by the issuer of the stablecoin to holders of the stablecoin, including, but not limited to, rights to redeem the stablecoin for legal tender or bank or credit union credit.
(B) The amount, nature, and quality of assets owned or held by the issuer of the stablecoin that may be used to fund any redemption requests from residents.
(C) Any risks related to how the assets described in subparagraph (B) are owned or held by the issuer that may impair the ability of the issuer of the stablecoin to meet any redemption requests from residents.
(D) Any representations made by the issuer of the stablecoin related to the potential uses of the stablecoin.
(E) Any representations made by the issuer of the stablecoin related to the risks of using the stablecoin as payment for goods or services or as a store of value.
(F) Any other factors the commissioner deems material to making their determination.
(c) (1) As a condition of providing an approval pursuant to subdivision (b), the commissioner may require the stablecoin issuer to obtain a license under Section 3203 and may impose additional requirements, restrictions, or prohibitions on the activities of the issuer of the stablecoin in order to protect the interests of residents who may use the stablecoin as payment for goods or services or as a store of value.
(2) The commissioner may impose additional requirements, restrictions, or prohibitions on the activities of a covered person exchanging, transferring, or storing an approved stablecoin or engaging in digital financial asset administration of an approved stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, in order to protect the interests of residents who may use the stablecoin as a payment for goods or services or as a store of value.
(d) (1) The commissioner shall revoke an approval under subdivision (b) if, after notice and reasonable opportunity to be heard, the commissioner determines that the issuer of the stablecoin markets the stablecoin in a manner that may create a reasonable expectation or belief among the general public that the stablecoin poses no more risk to a holder or user of the stablecoin than the risks posed to the holder or user of bank credit or a stored value product issued by a person licensed pursuant to Division 1.2.
(2) The commissioner may revoke an approval under subdivision (b) if, after notice and reasonable opportunity to be heard, the commissioner makes any of the following determinations:
(A) Changes in the activities of the covered person or the issuer of the stablecoin relative to the commissioner’s understanding of those activities when the commissioner made the approval may compromise the interests of residents who use or hold the stablecoin.
(B) Changes in market conditions within the financial system or within markets for digital financial assets relative to the commissioner’s understanding of the financial system or the markets when the commissioner made the approval may compromise the interests of residents who use or hold the stablecoin.
(C) The covered person or the issuer violates any requirement, restriction, or prohibition imposed by the commissioner pursuant to subdivision (c) or any other provision, requirement, rule, or regulation under this chapter.
(e) If the commissioner approves a stablecoin pursuant to this section, the commissioner shall make available on the department’s internet website the approval.

SEC. 5.

 Section 3605 of the Financial Code is amended to read:

3605.
 The requirements imposed by this chapter shall be operative on July 1, 2025. 2026. 

SEC. 6.

 Section 3907 of the Financial Code is amended to read:

3907.
 (a) On or after July 1, 2025, 2026,  an operator shall comply with Section 3201 to the extent that the operator engages in digital financial asset business activity.
(b) If an operator does not engage in digital financial asset business activity but allows or facilitates another person to engage in digital financial asset business activity via a digital financial asset transaction kiosk that is owned, operated, or managed by the operator, the operator shall do all of the following:
(1) On or after July 1, 2025, 2026,  ensure that the person engaging in digital financial asset business activity via the digital financial asset transaction kiosk has a license pursuant to this division.
(2) Ensure that any charges collected from a customer, whether collected by the operator, a person engaging in digital financial asset business activity via the digital financial asset transaction kiosk, or both, comply with the limits provided by Section 3904.
(3) Comply with all other provisions of this chapter.