AB 2285: Digital Financial Asset Banking Act.

The Digital Financial Assets Law, on or after July 1, 2026, prohibits a person from engaging in digital financial asset business activity, as defined, 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 specified conditions is true. The law defines digital financial asset to mean a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender and defines digital financial asset business activity to mean, among other similar things, 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.

This bill would make nonsubstantive changes to those provisions. bill, the Digital Financial Asset Banking Act, would generally regulate a bank or a credit union under the examination authority of the Department of Financial Protection and Innovation with respect to its provision of digital asset custody services, staking services, and digital asset transaction services, as those terms are defined, including by requiring certain disclosures to costumers and requiring certain financial safety measures. The bill would require a financial institution engaged in digital financial asset custody services to conduct an annual audit of its custodial activities and holdings that is either an independent audit or a review by the financial institutions board of directors for accuracy and signed be each board member under penalty of perjury. By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.