Amended IN Senate April 10, 2025 Amended IN Senate March 24, 2025 Amended IN Senate March 12, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 97Introduced by Senator GraysonJanuary 23, 2025An act to amend Sections 3102 and 3603 of the Financial Code, relating to financial regulation. LEGISLATIVE COUNSEL'S DIGESTSB 97, as amended, Grayson. Digital financial assets: stablecoins.Existing law, the Digital Financial Assets Law, prohibits a person, on or after July 1, 2026, 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. Existing law defines digital financial asset business activity to mean any of specified activities, including, among others, exchanging, transferring, or storing a digital financial asset, as specified, or exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games, as provided.This bill would remove exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games from the definition of digital financial business activity.The Digital Financial Assets Law authorizes the Commissioner of Financial Protection and Innovation to approve a stablecoin for various purposes 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. Existing law requires the commissioner to consider specified factors in determining whether to make an approval under those provisions.This bill would include additional factors the commissioner must consider in determining whether to make an approval under those provisions, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 3102 of the Financial Code is amended to read:3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.SEC. 2. Section 3603 of the Financial Code is amended to read:3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
Amended IN Senate April 10, 2025 Amended IN Senate March 24, 2025 Amended IN Senate March 12, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 97Introduced by Senator GraysonJanuary 23, 2025An act to amend Sections 3102 and 3603 of the Financial Code, relating to financial regulation. LEGISLATIVE COUNSEL'S DIGESTSB 97, as amended, Grayson. Digital financial assets: stablecoins.Existing law, the Digital Financial Assets Law, prohibits a person, on or after July 1, 2026, 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. Existing law defines digital financial asset business activity to mean any of specified activities, including, among others, exchanging, transferring, or storing a digital financial asset, as specified, or exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games, as provided.This bill would remove exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games from the definition of digital financial business activity.The Digital Financial Assets Law authorizes the Commissioner of Financial Protection and Innovation to approve a stablecoin for various purposes 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. Existing law requires the commissioner to consider specified factors in determining whether to make an approval under those provisions.This bill would include additional factors the commissioner must consider in determining whether to make an approval under those provisions, as specified.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Amended IN Senate April 10, 2025 Amended IN Senate March 24, 2025 Amended IN Senate March 12, 2025
Amended IN Senate April 10, 2025
Amended IN Senate March 24, 2025
Amended IN Senate March 12, 2025
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Senate Bill
No. 97
Introduced by Senator GraysonJanuary 23, 2025
Introduced by Senator Grayson
January 23, 2025
An act to amend Sections 3102 and 3603 of the Financial Code, relating to financial regulation.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 97, as amended, Grayson. Digital financial assets: stablecoins.
Existing law, the Digital Financial Assets Law, prohibits a person, on or after July 1, 2026, 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. Existing law defines digital financial asset business activity to mean any of specified activities, including, among others, exchanging, transferring, or storing a digital financial asset, as specified, or exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games, as provided.This bill would remove exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games from the definition of digital financial business activity.The Digital Financial Assets Law authorizes the Commissioner of Financial Protection and Innovation to approve a stablecoin for various purposes 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. Existing law requires the commissioner to consider specified factors in determining whether to make an approval under those provisions.This bill would include additional factors the commissioner must consider in determining whether to make an approval under those provisions, as specified.
Existing law, the Digital Financial Assets Law, prohibits a person, on or after July 1, 2026, 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. Existing law defines digital financial asset business activity to mean any of specified activities, including, among others, exchanging, transferring, or storing a digital financial asset, as specified, or exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games, as provided.
This bill would remove exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games from the definition of digital financial business activity.
The Digital Financial Assets Law authorizes the Commissioner of Financial Protection and Innovation to approve a stablecoin for various purposes 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. Existing law requires the commissioner to consider specified factors in determining whether to make an approval under those provisions.
This bill would include additional factors the commissioner must consider in determining whether to make an approval under those provisions, as specified.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 3102 of the Financial Code is amended to read:3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.SEC. 2. Section 3603 of the Financial Code is amended to read:3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 3102 of the Financial Code is amended to read:3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.
SECTION 1. Section 3102 of the Financial Code is amended to read:
### SECTION 1.
3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.
3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.
3102. For purposes of this division:(a) Applicant means a person that applies for a license under this division.(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.(c) Control means both of the following:(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.(2) When used in reference to a person, the direct or indirect power to do either of the following:(A) Vote 25 percent or more of any class of the voting securities issued by a person.(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.(d) Covered person means a person required to obtain a license pursuant to this division.(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.(f) Department means the Department of Financial Protection and Innovation.(g) (1) Digital financial asset means 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.(2) Digital financial asset does not include any of the following:(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.(i) Digital financial asset business activity means either of the following:(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.(m) Insolvent means any of the following:(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.(2) Being unable to pay debts as they become due.(3) Being insolvent within the meaning of federal bankruptcy law.(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.(o) Licensee means a person licensed or conditionally licensed under this division.(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.(r) (1) Resident means any of the following:(A) A person who is domiciled in this state.(B) A person who is physically located in this state for more than 183 days of the previous 365 days.(C) A person who has a place of business in this state.(D) A legal representative of a person that is domiciled in this state.(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).(u) Sign means, with present intent to authenticate or adopt a record, either of the following:(1) To execute or adopt a tangible symbol.(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:(1) Credit the digital financial asset to the account of another person.(2) Move the digital financial asset from one account of a resident to another account of the same resident.(3) Relinquish control of a digital financial asset to another person.(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.
3102. For purposes of this division:
(a) Applicant means a person that applies for a license under this division.
(b) Bank means a bank, savings bank, savings and loan association, savings association, or industrial loan company chartered under the laws of this state or any other state or under the laws of the United States.
(c) Control means both of the following:
(1) When used in reference to a transaction or relationship involving a digital financial asset, power to execute unilaterally or prevent indefinitely a digital financial asset transaction.
(2) When used in reference to a person, the direct or indirect power to do either of the following:
(A) Vote 25 percent or more of any class of the voting securities issued by a person.
(B) Direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, other than a commercial contract for goods or nonmanagement services, or otherwise, if no individual is deemed to control a person solely on account of being a director, officer, or employee of such person.
(d) Covered person means a person required to obtain a license pursuant to this division.
(e) Credit union means a credit union licensed under the laws of this state, or any other state, or a federal credit union chartered under the laws of the United States.
(f) Department means the Department of Financial Protection and Innovation.
(g) (1) Digital financial asset means 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.
(2) Digital financial asset does not include any of the following:
(A) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank or credit union credit, or a digital financial asset.
(B) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.
(C) A security registered with or exempt from registration with the United States Securities and Exchange Commission or a security qualified with or exempt from qualifications with the department.
(h) Digital financial asset administration means issuing a digital financial asset with the authority to redeem the digital financial asset for legal tender, bank or credit union credit, or another digital financial asset.
(i) Digital financial asset business activity means either of the following:
(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor.
(2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals.
(j) Digital financial asset control services vendor means a person that has control of a digital financial asset solely under an agreement with a person that, on behalf of another person, assumes control of the digital financial asset.
(k) Exchange, when used as a verb, means to assume control of a digital financial asset from, or on behalf of, a resident, at least momentarily, to sell, trade, or convert either of the following:
(1) A digital financial asset for legal tender, bank or credit union credit, or one or more forms of digital financial assets.
(2) Legal tender or bank or credit union credit for one or more forms of digital financial assets.
(l) Executive officer includes, but is not limited to, an individual who is a director, officer, manager, managing member, partner, or trustee of a person that is not an individual, or any other person who performs similar policymaking or policy implementation functions.
(m) Insolvent means any of the following:
(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute.
(2) Being unable to pay debts as they become due.
(3) Being insolvent within the meaning of federal bankruptcy law.
(n) Legal tender means a medium of exchange or unit of value, including the coin or paper money of the United States, issued by the United States or by another government.
(o) Licensee means a person licensed or conditionally licensed under this division.
(p) (1) Person means an individual, partnership, estate, business or nonprofit entity, or other legal entity.
(2) Person does not include a government-sponsored enterprise, government, or governmental subdivision, agency, or instrumentality.
(q) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(r) (1) Resident means any of the following:
(A) A person who is domiciled in this state.
(B) A person who is physically located in this state for more than 183 days of the previous 365 days.
(C) A person who has a place of business in this state.
(D) A legal representative of a person that is domiciled in this state.
(2) Notwithstanding paragraph (1), resident does not include a licensee or an affiliate, as defined in subdivision (a) of Section 90005, of a licensee.
(s) Responsible individual means an individual who has direct control over, or significant management policy and decisionmaking authority with respect to, a licensees digital financial asset business activity in this state.
(t) SAFE Act means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).
(u) Sign means, with present intent to authenticate or adopt a record, either of the following:
(1) To execute or adopt a tangible symbol.
(2) To attach to, or logically associate with, the record an electronic symbol, sound, or process.
(v) State means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
(w) Store, except in the phrase store of value, means to maintain control of a digital financial asset on behalf of a resident by a person other than the resident. Storage and storing have corresponding meanings.
(x) Transfer means to assume control of a digital financial asset from, or on behalf of, a resident and to subsequently do any of the following:
(1) Credit the digital financial asset to the account of another person.
(2) Move the digital financial asset from one account of a resident to another account of the same resident.
(3) Relinquish control of a digital financial asset to another person.
(y) United States dollar equivalent of digital financial assets means the equivalent value of a particular digital financial asset in United States dollars shown on a digital financial asset exchange based in the United States for a particular date or period specified in this division.
SEC. 2. Section 3603 of the Financial Code is amended to read:3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
SEC. 2. Section 3603 of the Financial Code is amended to read:
### SEC. 2.
3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.(I) 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 commissioners 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 commissioners 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 departments internet website the approval.
3603. (a) Notwithstanding subdivision (a) of Section 3601, a covered person may exchange, transfer, or store a stablecoin or engage in digital financial asset administration of that stablecoin, whether directly or through an agreement with a digital financial asset control services vendor, if that 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) Whether there are collateralization requirements that include digital assets as eligible collateral that address the type and amount of digital assets and recognize the unique nature of algorithmic stablecoins. the issuer of the stablecoin is subject to any legally enforceable collateralization requirements; the details of any collateralization requirements, including the required collateralization level and the type and quality of assets being held as collateral; whether any assets held as collateral by the issuer are digital financial assets, and, if so, the amount, nature, and quality of those assets; and any other issues relevant to algorithmic stablecoins and how the issuer addresses or mitigates those risks.
(G) Whether there are programmable liquidation, redemption, or settlement mechanism requirements.
(H) Whether there are code security audit requirements for major new initial releases and ongoing satisfaction of audit requirements through transparent code.
(I) 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 commissioners 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 commissioners 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 departments internet website the approval.