Digital financial asset businesses.

Existing law, the Digital Financial Assets Law, prohibits, on or after July 1, 2025, a person from engaging in digital financial asset business activity, or holding itself out as being able to engage in digital financial asset business activity, with, or on behalf of, a resident, unless any of certain criteria are met, including that the person is licensed with the Department of Financial Protection and Innovation, as prescribed, or the person submits an application on or before July 1, 2025, and is awaiting approval or denial of that application. Existing law defines "digital financial asset" for these purposes to mean a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender, except as specified. Existing law also defines "covered person" to mean a person required to obtain a license under these provisions. This bill would extend the July 1, 2025, dates to July 1, 2026. Existing law requires a licensee to maintain, for all digital financial asset business activity with, or on behalf of, a resident for 5 years after the date of the activity, certain records, including a general ledger maintained at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee. This bill would require a licensee to also maintain, if applicable, a report maintained at least monthly that demonstrates compliance with conditions that authorize the licensee to exchange, transfer, or store a digital financial asset or engage in digital financial asset administration, as specified. Existing law requires, on or after July 1, 2025, a covered person to make certain disclosures for the protection of residents, as prescribed, and to maintain in its control an amount of each type of digital financial asset sufficient to satisfy the aggregate entitlements of the persons to the type of digital financial asset, as prescribed. This bill would extend the July 1, 2025, date to July 1, 2026. Existing law generally regulates, on or after July 1, 2025, the provision of stablecoins, as prescribed, including by prohibiting a covered person from exchanging, transferring, or storing a digital financial asset that is a stablecoin or engaging in digital financial asset administration of a stablecoin, as specified, unless certain conditions are met. This bill would extend the July 1, 2025, date to July 1, 2026, and would specify that a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, as specified, if the stablecoin is approved by the commissioner and complies with certain requirements, restrictions, or prohibitions established by the commissioner. Existing law requires, on or after July 1, 2025, an operator of a digital financial asset transaction kiosk that does not itself engage in digital financial asset business activity to ensure that the person engaging in digital financial asset business activity via the digital financial asset transaction kiosk has a license pursuant to these provisions. This bill would extend the July 1, 2025, date to July 1, 2026.