Department of Financial Protection and Innovation: state payments., the official text

An act to add and repeal Section 3802 of the Financial Code, relating to digital financial assets.

LEGISLATIVE COUNSEL'S DIGEST

The Digital Financial Assets Law (DFAL) generally regulates digital financial asset business activity, including by prohibiting a covered person from taking certain actions with digital financial assets if that asset is a stablecoin, as defined and prescribed. The DFAL requires, among other charges, an applicant for a license to include a nonrefundable fee with an application, as specified.
This bill would require the Department of Financial Protection and Innovation, in consultation with the Treasurer and the Controller, to adopt regulations to allow specified payments required under the DFAL to be made with stablecoins. The bill would require the department to submit, on or before January 1, 2029, a report to the Legislature on those regulations, as specified. The bill would require the Treasurer and the Controller to submit, on or before January 1, 2028, a report to the Legislature containing specified recommendations. This bill would become operative on July 1, 2027, and sunset its provisions on January 1, 2032.

The people of the State of California do enact as follows:

SECTION 1.
Section 3802 is added to the Financial Code, to read:
3802.
(a) (1) Except as provided in paragraphs (2) and (3), in consultation with the Treasurer and the Controller, the department shall adopt regulations to allow a payment required under this division to be made with a stablecoin that is issued by a licensee of this division and that may be redeemed directly from the issuer.
(2) The regulations required by paragraph (1) shall only allow payments made by an applicant or licensee to the department and shall not allow payments related to any enforcement measure taken pursuant to Chapter 4 (commencing with Section 3401).
(3) The regulations required by paragraph (1) shall not allow a payment to be made with a stablecoin if the Controller, the Treasurer, or the department determines the payment would interfere or conflict with the requirements in any of the following:
(A) Article 2 (commencing with Section 12320) of Chapter 4 of Part 2 of Division 3 of Title 2 of the Government Code.
(B) Article 2 (commencing with Section 12410) of Chapter 5 of Part 2 of Division 3 of Title 2 of the Government Code.
(C) Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code.
(b) On or before January 1, 2029, the department shall submit a report to the Legislature, pursuant to Section 9795 of the Government Code, containing all of the following:
(1) The number and value of stablecoin transactions processed.
(2) Technical and regulatory challenges encountered.
(c) On or before January 1, 2028, the Treasurer and the Controller, in consultation with the department, shall submit a report to the Legislature, pursuant to Section 9795 of the Government Code, containing recommendations for payments under other laws and to other state governmental agencies to be made using stablecoins.
(d) The cost to the department of implementing and administering this section shall be recovered in accordance with subdivision (c) of Section 3211.
(e) For purposes of this section, “stablecoin” has the same meaning as defined in Section 3601.
(f) (1) This section shall become operative on July 1, 2027.
(2) This section shall be operative only until January 1, 2032, and as of that date is repealed.