CA AB2269

Establishes the Digital Financial Assets Law, effective January 1, 2025, requiring persons engaging in digital financial asset business activity with California residents to obtain a license from the Department of Financial Protection and Innovation or qualify for an exemption.

Defines "digital financial asset" as a digital representation of value used as a medium of exchange, unit of account, or store of value that is not legal tender, with specific exclusions for rewards programs and in-game currencies.

Requires licensees to maintain surety bonds or trust accounts, adequate capital reserves, comprehensive policies for information security, anti-fraud, anti-money laundering, and business continuity, and make specific disclosures to residents including fee schedules and service outage history.

Mandates licensees maintain records of all transactions for 5 years, keep a monthly general ledger, and maintain sufficient digital assets on hand to cover all resident entitlements (pro-rata in case of shortfall).

Authorizes the department to examine licensees, assess civil penalties up to $100,000 per day for unlicensed activity and $20,000 per day for material violations by licensees, and prohibits stablecoin exchanges unless the issuer is licensed or a bank and maintains eligible securities equal to outstanding stablecoins.