Digital Financial Asset Banking Act.

Crime Education Labor

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Valencia
Last action: 2026-04-22
Official status: From committee: Do pass and re-refer to Com. on APPR. (Ayes 15. Noes 0.) (April 21). Re-referred to Com. on APPR.
Effective date: Not listed

Plain English Breakdown

The official source material does not provide details on penalties for non-compliance with the new regulations.

Digital Financial Asset Banking Act

The Digital Financial Asset Banking Act regulates banks and credit unions in California when they offer digital asset services, requires them to do annual audits of their custodial activities, and sets rules for how they handle these assets.

What This Bill Does

Defines a 'digital financial asset' as a type of digital money that can be used as a medium of exchange, unit of account, or store of value but is not legal tender like dollars.
Requires banks and credit unions to follow certain safety measures when handling digital financial assets, such as conducting annual audits of their custodial activities.
Gives the Department of Financial Protection and Innovation the power to enforce these rules with administrative and civil remedies.

Who It Names or Affects

Banks and credit unions in California that provide digital asset custody services, staking services, or transaction services.

Terms To Know

Digital Financial Asset: A type of digital money used as a medium of exchange, unit of account, or store of value that is not legal tender.
Annual Audit: A yearly review to check if financial records are accurate and follow rules.

Limits and Unknowns

The bill does not specify what happens if a bank or credit union fails to comply with the new regulations.
It is unclear how this law will affect existing digital asset businesses that do not operate through banks or credit unions.

Bill History

2026-04-22 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 15. Noes 0.) (April 21). Re-referred to Com. on APPR.
2026-04-21 California Legislative Information
From committee: Do pass and re-refer to Com. on P. & C.P. (Ayes 9. Noes 0.) (April 20). Re-referred to Com. on P. & C.P.
2026-04-20 California Legislative Information
Joint Rule 62(a), file notice suspended.
2026-04-16 California Legislative Information
(Pending re-refer to Com. on P. & C.P.)
2026-04-16 California Legislative Information
Assembly Rule 56 suspended.
2026-03-17 California Legislative Information
Re-referred to Com. on B. & F.
2026-03-16 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended.
2026-03-16 California Legislative Information
Referred to Coms. on B. & F. and P. & C.P.
2026-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2026-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2285, as amended, Valencia.
Digital Financial
Assets Law: prohibitions.
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 institution’s 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.
This bill would authorize the department to enforce its provisions with administrative and civil remedies, as specified.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish
procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Read the full stored bill text

Download Bill PDF