RELATING TO DIGITAL ASSETS.

SB3184

THE SENATE

S.B. NO.

3184

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to digital assets
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The
legislature finds that the evolution of financial technology has created demand
for secure, regulated institutions capable of providing digital asset services,
including custody, staking, and fiduciary transactions.
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The safekeeping of digital assets, through
one-to-one reserves, strong cybersecurity practices, and independent audits, is
critical to maintaining consumer confidence and financial system integrity.

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The legislature further finds that banks
and credit unions are well-positioned to offer trusted digital asset services
when supported by clear rules, sound oversight, and modernized financial
regulatory frameworks.
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Enabling these
institutions to provide digital asset services in either a fiduciary or non-fiduciary
capacity allows for responsible innovation while preserving the legal rights
and protections of customers.

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The legislature further finds that
state-chartered financial institutions must be empowered to meet customer needs
in the digital economy while remaining subject to robust oversight and
prudential standards.

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Accordingly, the purpose of this Act is to establish
a regulatory framework to allow for the safekeeping of digital assets while
ensuring continued innovation in digital banking.

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SECTION 2.
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Chapter 412, Hawaii Revised Statutes, is amended by adding a new part to
article 3 to be appropriately designated and to read as follows:

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Part
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Digital Asset
banking

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412:3-A
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Definitions.
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As used in this part:

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"Commissioner" means the
commissioner of financial institutions.

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"Customer" means any person or
entity for whom an institution provides digital asset services, including a
digital asset account holder or a person on whose behalf the institution acts
in a fiduciary capacity.

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"Digital asset" means virtual
currency, cryptocurrencies, natively electronic assets, including stablecoins
and non-fungible tokens, and other digital-only assets that confer economic,
proprietary, or access rights or powers.

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"Digital asset company" means a
business entity that is registered to do business in the State and is licensed
under the laws of the State as a money transmitter or under any other
applicable digital asset licensing regime, and that is authorized to provide
digital asset custody services, digital asset transaction services, or both.

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"Digital asset custody services"
means the safekeeping or custody of digital assets on behalf of customers by an
institution, including maintaining control over the digital assets and any
associated cryptographic keys.

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"Digital asset services" means
any services involving digital assets offered by an institution, including
digital asset custody services, staking services, and digital asset transaction
services.

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"Digital asset transaction
services" means services that facilitate the execution of digital asset
purchase or sale transactions on behalf of a customer.

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"Fiduciary capacity" means acting
with trust power pursuant to section 412:8-201 to provide digital asset
services on behalf of a customer, including discretionary management or
administration of digital assets subject to fiduciary duties.

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"Institution" means a bank or
credit union chartered or licensed under the laws of the State and authorized
to conduct digital asset services pursuant to this part.

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"Keys" means a pair of
cryptographic codes associated with a digital asset wallet, consisting of a
public key and a private key; provided that the public key enables the receipt
of digital assets and verification of digital signatures, and the Private key
enables the control, transfer, or management of digital assets in the wallet.

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"Material cybersecurity incident"
means a cybersecurity breach or event that materially compromises the security,
confidentiality, or integrity of an institution's information systems or the
digital assets under the institution's control.

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"Non-fiduciary capacity" means
providing digital asset custody services solely for safekeeping, without
discretionary authority to manage or transfer the assets, and with legal title
and control of the assets remaining with the customer.

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"Slashing" means a penalty
imposed by a blockchain protocol that results in the forfeiture or reduction of
staked digital assets or rewards due to a validator misconduct or failure.

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"Staking" means committing
digital assets to a blockchain network to participate in the network's
operations by validating transactions, proposing and attesting to blocks, and
securing the network.

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"Staking rewards" means any
interest, yield, or other compensation earned by a customer through staking
digital assets on a blockchain network.

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"Subcustodian" means a third
party that an institution uses to hold digital assets on the institution's
behalf as part of providing custody services to a customer.

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"Wallet" means a digital
interface or physical device that stores digital assets or private keys,
enabling the owner to securely manage, transfer, and maintain independent
control over digital assets.

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412:3-B
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Banks and credit unions; digital asset
custody services.
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(a)
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An institution may directly provide digital
asset custody services to its customers.

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(b)
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An institution may provide digital asset custody services in either a
fiduciary capacity or a non-fiduciary capacity, subject to the following:

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(1)
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Fiduciary
capacity.
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An institution shall not
provide digital asset custody services in a fiduciary capacity unless it is
authorized to exercise trust powers pursuant to section 412:8-201.
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The institution shall exercise its fiduciary
capacity in accordance with all applicable fiduciary duties and standards,
including those governing trustees, custodians, and agents; and

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(2)
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Non-fiduciary
capacity.
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An institution may provide
digital asset custody services in a non-fiduciary capacity; provided that the
institution shall act solely as a custodian for the safekeeping of digital
assets and shall not exercise discretionary authority over the customer's
digital assets.
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Institutions acting in a
non-fiduciary capacity shall act only on the explicit instructions of the
customer and shall not independently manage, transfer, or dispose of the
digital assets.

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(c)
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An institution shall enter into a written custodial agreement with each
customer before undertaking digital asset custody services.
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The custodial agreement shall clearly specify
whether the institution is acting in a fiduciary capacity or non-fiduciary
capacity for the customer and whether the customer's assets are pooled pursuant
to subsection (e).
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The agreement shall
include, at a minimum, the following written disclosures, which shall be
prominently presented to the customer:

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(1)
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Digital
assets held in custody by the institution are not deposits, obligations, or
other liabilities of the institution; and

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(2)
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Digital
assets in custody are not insured by the Federal Deposit Insurance Corporation,
National Credit Union Administration, or any other federal or state deposit
insurance or share insurance program.

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(d)
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An institution providing digital asset custody services shall maintain
control over the quantity of each type of digital asset in its custody that
exceeds the total quantity of that digital asset owed to customers or required
to be held on behalf of customers.
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The
institution shall hold not less than a one-to-one full reserve of each digital
asset owed or attributable to its customers and the institution's aggregate
holdings of each digital asset shall be greater than the total amount of that
asset owed by the institution to its customers.

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(e)
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An institution may hold digital assets of multiple customers in a pooled
omnibus custody arrangement; provided that the institution maintains accurate
records identifying each customer's interest in the digital assets.
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An institution may segregate a customer's
digital assets in a separate account or digital wallet upon the customer's
request or as required by the custodial agreement.
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Pooled custody of assets shall not relieve
the institution of requirements, pursuant to subsection (d), to individually
account for and fully reserve each type of digital asset for the benefit of
customers.

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(f)
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An institution providing digital asset custody services shall undergo an
independent audit of its custodial activities and holdings at least once every
calendar quarter.
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The audit shall be
conducted by a qualified independent auditor and shall verify that the
institution's holdings of each digital asset exceed the amounts of each digital
asset owed or attributable to its customers.
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The institution shall provide the results of each quarterly audit to the
commissioner and shall make the results of each quarterly audit available to
its customers upon request.

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(g)
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An institution shall notify the commissioner in writing no later than
sixty days before initiating digital asset custody services.
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The institution shall provide any information
required by the commissioner to evaluate the institution's plans, policies, and
procedures for compliance with this section.

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(h)
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An institution shall not offer digital asset custody services in a
fiduciary capacity without first obtaining written approval from the
commissioner.
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In applying for approval
from the commissioner, the institution shall demonstrate that it has satisfied
all requirements to exercise trust powers and that it has the necessary
expertise, policies, and procedures in place to safely conduct fiduciary
digital asset custody services.
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The
commissioner may condition or limit the scope of an institution's authority to
offer fiduciary digital asset custody services and may impose supervisory
conditions that the commissioner deems necessary to ensure the safety and
soundness of the institution and the protection of customers' assets.

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412:3-C
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Subcustody; digital assets.
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(a)
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An institution may use one or more subcustodians to assist in providing
digital asset custody services without obtaining separate consent from
customers; provided that the use of subcustodians shall be disclosed in each
customer's custodial agreement.
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The use
of one or more subcustodians shall not relieve the institution of its duties as
a custodian or the requirements of this part, and the institution shall remain
legally responsible to the customer for the custody of the customer's digital
assets.

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(b)
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An institution may place digital assets into subcustody with the
following entities:

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(1)
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A
bank chartered or licensed under the laws of the State, another state, or the
federal government;

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(2)
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A
special purpose depository institution chartered or licensed under the laws of the
State or another state; and

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(3)
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A
digital asset company that holds a current license under the laws of the State
as either a virtual currency business or a money transmitter.

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(c)
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An institution placing digital assets in subcustody shall retain legal
control and custody of the assets.
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The
subcustodial agreement shall require the institution to remain the custodial
record holder of the assets on behalf of its customers and the digital assets
shall remain the property of the institution's customers.

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(d)
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An institution shall obtain a written agreement with each subcustodian engaged
by the institution.
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Each agreement shall
describe the rights and responsibilities of the institution and the
subcustodian and require compliance with this part.
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The institution shall make any subcustodial
agreement available to the commissioner for review upon the commissioner's
request.

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(e)
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For any digital assets held in subcustody, the institution shall require
the subcustodian to maintain a one-to-one reserve of each asset type.
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The amount of each type of digital asset held
by the subcustodian shall at all times be equal to the amount of that asset
credited to the institution's customers.
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Different types of digital assets shall not be commingled for reserve
purposes, and assets held by a subcustodian on behalf of an institution shall
not be commingled with assets held on behalf of a different institution or
person.

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(f)
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An institution shall only use a subcustodian that maintains insurance
coverage sufficient to protect against the loss of digital assets due to
cybersecurity breaches, theft, or other adverse events.
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The institution shall ensure that the subcustodian's
insurance is valid, in effect, and adequate to cover the value of assets held
in subcustody.

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(g)
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If an institution provides digital asset custody services in a fiduciary
capacity, any subcustodian of that institution shall be authorized to exercise
trust powers pursuant to section 412:8-201.
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The institution shall provide notice to the commissioner of its use of a
subcustodian in a fiduciary capacity, subject to all notice requirements
applicable to its fiduciary custody authority.

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(h)
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Digital assets held in subcustody shall be included in the scope of the
institution's quarterly audits conducted for the purposes of section
412:3-B(f).
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All records relating to
digital assets held in subcustody shall be subject to examination by the
commissioner.

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412:3-D
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Digital assets; staking.
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(a)
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An institution may stake digital assets held in custody on behalf of its
customers.
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Staking services may be
provided for digital assets held in either a fiduciary or non-fiduciary
capacity, subject to the requirements of this section.
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Unless otherwise instructed by the customer,
an institution may include a customer's eligible custodial digital assets in
its staking program by default; provided that the customer has been notified of
required disclosures and given an opportunity to opt out of the staking program
to pursuant to subsection (h).

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(b)
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Any digital asset that an institution stakes on behalf of a customer
shall remain the property of that customer.
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Staked customer assets, and any staking awards associated with those
assets, shall not be recorded as assets or liabilities on the institution's
balance sheet.
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The institution shall
ensure that staked assets are safeguarded and not subject to any lien, security
interest, or claim of the institution's creditors.
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No institution shall encumber, hypothecate,
or otherwise use a customer's staked assets for any purpose except for
facilitating staking on the relevant blockchain or distributed ledger, and
shall not expose the assets to risk of loss except to the extent inherent in
the normal operation of the staking process.

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(c)
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An institution may use one or more subcustodians or digital asset
companies to facilitate the staking of digital assets on behalf of its
customers; provided that the institution shall retain legal control over the
staked assets and maintain appropriate oversight of the staking process.
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The use of one or more subcustodians or
digital asset companies for staking shall not relieve the institution of its
duties to the customer under this section, and the institution shall remain
responsible for ensuring compliance with all requirements of this section.
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Any subcustodial or third-party arrangement for
staking shall be governed by a written agreement that describes the rights and
responsibilities of the institution and the subcustodian or digital asset
company that shall require compliance with the provisions of this section.

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(d)
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An institution that stakes digital assets on behalf of customers shall
maintain reserves of each digital asset in amounts sufficient to facilitate
timely customer withdrawals and transfers.
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The total quantity of each digital asset type held by the institution,
including those held by any subcustodian or third-party provider, shall equal
or exceed the total quantity of that digital asset owed to customers.
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The institution shall ensure that an
appropriate portion of each digital asset type remains unstaked or otherwise
available to meet customer withdrawal requests promptly, subject to any staking
lock-up or unbonding periods disclosed to the customer pursuant to this part.

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(e)
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All rewards, yields, or other benefits earned from the staking of a
customer's digital assets shall accrue to the benefit of that customer.
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An institution may deduct a reasonable fee or
commission from staking rewards only if that fee has been disclosed in writing
to the customer before providing staking services.
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Except as otherwise agreed in writing by the
customer, the institution shall credit all net staking rewards, after the
deduction of any disclosed fees, to the customer's account in the same type of
digital asset that generated the rewards.
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Credits for staking rewards shall be made within a reasonable period
after the rewards are received or become available to the institution.

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(f)
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An institution shall notify the commissioner of its intention to provide
staking services in writing no later than sixty days before initiating the
services, which shall include any information that the commissioner requires to
evaluate the institution's plans, policies, and procedures for conducting the
staking services in a safe and sound manner.
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An institution shall not offer staking services without obtaining
written approval from the commissioner.
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If
the institution will be staking digital assets in a fiduciary capacity, the
institution shall be authorized to exercise trust powers under state law and
shall obtain any necessary approval from the commissioner to engage in the
fiduciary staking services.

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(g)
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An
institution's digital asset staking activities shall be included in the scope
of the institution's quarterly audits conducted for the purposes of section
412:3-B(f).
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The institution shall
implement and maintain written internal policies and procedures to effectively
identify, monitor, and manage risks associated with staking, including
operational, cybersecurity, slashing, and other risks associated with staking
services.
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The institution shall maintain
insurance coverage adequate to protect against potential losses arising from
staking activities, including those losses attributable to slashing,
cybersecurity breaches, theft, or other adverse events, and shall ensure
coverage remains valid, in effect, and sufficient to cover the current value of
assets staked on behalf of customers.
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All records relating to the institution's staking services shall be
available for independent audit and examination by the commissioner, consistent
with the treatment of non-staked custodial asset records.

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(h)
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Before initiating staking services, an institution shall provide the
customer with clear and conspicuous written disclosure of terms and conditions
of the staking program.
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The disclosure
shall inform the customer, at a minimum, that:

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(1)
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The
institution may automatically stake eligible digital assets in the customer's
account unless the customer affirmatively opts out of the staking program;

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(2)
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The
key risks associated with staking, such as the potential for loss of staked
assets or rewards due to slashing or other network events, and cybersecurity
and operational risks inherent in the staking process;

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(3)
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Any
applicable lock-up, unbonding, or notice period before staked assets can be
withdrawn or transferred, and the implications for the customer's access to
digital assets;

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(4)
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The
customer's rights and obligations related to the staking service, including the
right to discontinue participation in staking at any time and the entitlement
to receive staking rewards earned on their assets; and

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(5)
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The
amount or rate of any fees or commissions that the institution will deduct from
staking rewards as compensation for providing the staking service.

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(i)
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A customer's agreement to participate in the staking program shall
constitute authorization for the institution to stake the customer's digital
assets in accordance with this section.
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All disclosures required by subsection (h) shall be written in plain
language and presented in a manner that is readily accessible and
understandable to the customer.

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412:3-E
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Cybersecurity; compliance.
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(a)
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An institution shall comply with all applicable federal and state laws
and regulations governing its digital asset custody and staking services,
including the United States Bank Secrecy Act, P.L. 91‑508, Gramm-Leach-
Bliley Act, P.L. 106-102, customer due diligence requirements issued by the
United States Department of the Treasury's Financial Crimes Enforcement
Network, and sanctions administered by the United States Department of the
Treasury's Office of Foreign Assets Control.

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(b)
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An institution shall establish and maintain an anti-money laundering
compliance program that is risk-based and commensurate with the nature and
scope of the institution's digital asset custody staking services.
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The program shall include:

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(1)
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A
system of internal controls to ensure ongoing compliance with the Bank Secrecy
Act, P.L. 91-508, or other applicable anti-money laundering requirements;

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(2)
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An
independent testing for compliance to be conducted by qualified internal audit
personnel or an independent external party;

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(3)
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The
designation of a Bank Secrecy Act and anti-money laundering compliance officer
or officers responsible for coordinating and monitoring day-to-day compliance
with the program; and

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(4)
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Appropriate
risk-based procedures for conducting ongoing customer due diligence, including
monitoring customer transactions and updating customer information as
necessary.

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(c)
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An institution shall implement and maintain a written cybersecurity
program designed to ensure the security of the institution's digital asset
custody and staking systems, and to protect the confidentiality, integrity, and
availability of customer digital assets and related information; provided that
the cybersecurity program shall be commensurate with the institution's size and
complexity and the sensitivity of the institution's operations and shall align
with the applicable federal cybersecurity standards for financial institutions,
including the Federal Financial Institutions Examination Council Information
Technology Examination Handbook and standards established by the National
Institute of Standards and Technology; provided further that the program shall
comply with applicable federal financial privacy and data security
requirements.
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The cybersecurity program
shall include appropriate administrative, technical, and physical safeguards to
protect against anticipated threats or hazards and unauthorized access to or
theft of customer asset information.

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(d)
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An institution shall notify the commissioner as soon as possible and in
no event later than seventy-two hours after discovering any material
cybersecurity incident that impacts the institution's digital asset custody or
staking systems or the digital assets held or managed through those
systems.
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The institution shall include
in the notice a description of the incident and its likely impact on the
institution and its customers.
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The
notice shall be given in accordance with procedures prescribed by the
commissioner.

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(e)
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An institution shall maintain detailed records of its compliance efforts
under this section, including all policies, procedures, risk assessments, audit
reports, and training materials related to its anti-money laundering program
and cybersecurity program.
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All records
and supporting documentation shall be retained for a period of at least five
years and shall be made available for inspection by the commissioner upon
request or during any examination.

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(f)
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Each institution shall designate qualified individuals responsible for
overseeing the institution's anti-money laundering compliance program and its
cybersecurity program.
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The designated
anti-money laundering compliance officer and the designated cybersecurity
program officer shall have the appropriate expertise, authority, and resources
to administer their respective programs and to enforce compliance with all
applicable laws and regulations.
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An
institution shall promptly report to the commissioner the names and contact
information of the persons designated as the anti-money laundering compliance
officer and cybersecurity program officer and shall notify the commissioner of
any changes to the designations.

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(g)
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The commissioner may adopt rules and regulations as necessary to
implement, clarify, and enforce the requirements of this section, including
more specific standards for cybersecurity programs, definition of terms, and
detailed requirements for anti-money laundering and customer due diligence
programs for digital asset custody and staking services.
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The commissioner may also issue advisory
guidance to assist institutions in complying with the provisions of this
section.

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412:3-F
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Fiduciary digital asset transaction
authority.
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(a)
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An institution shall exercise trust powers
under state law only when acting in its fiduciary capacity to facilitate the
purchase or sale of digital assets on behalf of a fiduciary account or
customer, subject to the requirements of this section.

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(b)
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An institution shall execute a digital asset transaction under this
section only:

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(1)
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Pursuant
to the express instruction of the customer for whom the institution is acting
as a fiduciary; or

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(2)
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In
the exercise of discretionary investment authority granted to the institution
under the governing fiduciary instrument or applicable law, consistent with the
institution's fiduciary duties.

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(c)
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An institution intending to engage in digital asset purchase or sale
services under this section shall provide written notice to the commissioner no
later than sixty days before initiating digital asset purchase or sale
services.
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The institution shall initiate
digital asset purchase or sale services only after the sixty-day notice period
has elapsed, unless the commissioner specifies an earlier effective date or
objects in writing during the notice period.

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(d)
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Any purchase or sale of digital assets executed under this section shall
be affected only through or with a counterparty that is duly licensed or
chartered to conduct digital asset business activity.

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(e)
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An institution facilitating digital asset transactions under this
section shall act solely in a fiduciary capacity for the benefit of its customers
and shall not engage in proprietary trading of digital assets.
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No purchase or sale of a digital asset shall
be made for the institution's own account under the authority of this section,
and all transactions shall be solely for the account or benefit of the
fiduciary customer.

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(f)
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An institution facilitating digital asset transactions under this
section may use subcustodians or third-party agents to execute transactions on
behalf of fiduciary accounts.
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The
institution may delegate discretionary authority to these subcustodians or
agents regarding the timing, sequence, and venue of transaction execution.
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Any delegation shall comply with the
fiduciary responsibilities of the institution and be subject to ongoing
oversight.
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The institution shall perform
due diligence and maintain continuous monitoring of any subcustodian or
execution agent to ensure compliance with this part and the protection of
fiduciary assets.
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Delegation of
authority under this subsection shall not relieve the institution of its
fiduciary obligations or its ultimate responsibility for compliance with the
requirements of this part.

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(g)
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An institution that purchases a digital asset under this section for a
fiduciary account shall ensure that the asset is transferred into the
institution's fiduciary custody as soon as commercially practicable after the
execution of the transaction.
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All
digital assets acquired pursuant to this section shall be held in custody in
accordance with the fiduciary custody standards established in this part, and
shall be maintained under the institution's control consistent with its
fiduciary obligations.

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(h)
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An institution shall disclose to its customers or persons on whose
behalf it acts, before or at the time of any digital asset transaction pursuant
to this section:

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(1)
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The
methodology or basis used to determine the execution price of the digital asset
transaction;

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(2)
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Any
spreads, fees, commissions, or other charges that will be applied to the
transaction; and

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(3)
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The
expected timeline for settlement of the transaction and for the digital asset
to be available in the customer's fiduciary account;

provided
that any disclosures under this subsection shall be provided in a clear and
conspicuous written form and in compliance with any disclosure standards set by
the commissioner.

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(i)
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For each digital asset purchase or sale executed under this section, the
institution shall create and retain an electronic record of the transaction,
including, at a minimum, the date and time of the execution; the type and
amount of digital assets purchased or sold; the price at which the transaction
was executed; the identity of the counterparty or any execution agent used; and
all fees, commissions, or spreads charged.
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These records shall be maintained in accordance with applicable record
retention requirements for fiduciary accounts and shall be made available to
the commissioner upon request or during examination.
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The institution shall document its compliance
with the requirements of this section and shall be prepared to demonstrate
compliance to the commissioner.

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412:3-G
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Enforcement; supervisory authority.
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(a)
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If the commissioner determines that an institution:

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(1)
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Has
violated any provision of this part or any order issued under this part;

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(2)
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Has
engaged in any unsafe or unsound practice in connection with its digital asset
services; or

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(3)
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Is
operating in a manner that threatens the safety or security of customer digital
assets,

the
commissioner may exercise the enforcement powers pursuant to this section.

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(b)
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The commissioner may issue a written order directing an institution to
take specific corrective action to remedy any condition or violation identified
under subsection (a).
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The order shall
state the grounds for issuance and the required remedial measures.
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The institution shall, within ten days of
receiving the order, respond in writing to the commissioner detailing the
corrective actions taken or that will be taken to address the issues identified
by the commissioner.
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Failure to
adequately respond or comply within the ten days may prompt further enforcement
action pursuant to this section.

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(c)
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The commissioner may, after notice and an opportunity for hearing, issue
an order requiring an institution to cease and desist from any violation or
unsafe or unsound practice.
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The
commissioner shall serve to the institution a written notice describing the
alleged violation or practice and specifying a time and place for a hearing to
be held at which the institution may present evidence or argument.
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The hearing shall be held no later than
fifteen days after the notice has been issued by the commissioner.
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If, after the hearing, the commissioner finds
that the institution has engaged in the alleged conduct, the commissioner may
issue a cease and desist order for the institution to immediately discontinue
the specified conduct and take affirmative action necessary to prevent its
recurrence.

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(d)
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If the commissioner finds that an institution's conduct or condition is
likely to cause immediate and irreparable harm to is customers or the public
before a formal hearing can be concluded, the commissioner may issue a
temporary emergency order.
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The order may
direct the institution to immediately cease or refrain from a specified
activity, or to take any other action necessary to prevent or mitigate future
harm.
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A temporary emergency order shall
be effective upon service on the institution.
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An institution subject to a temporary emergency order shall be given the
opportunity for an expedited hearing.
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Upon the institution's request, a hearing shall be held no later than
ten days after the commissioner issues an emergency order.
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Following the hearing, the commissioner may
stay, modify, or make permanent the order.
�

If no hearing is requested within ten days or if the institution fails
to appear at the scheduled hearing, the temporary order shall remain in effect
until the commissioner lifts or replaces the order.

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(e)
�

The commissioner may impose civil monetary penalties for violations of
this part.
�
For the first offense, the
penalty shall not exceed $5,000 per violation.
�

For each subsequent offense, the penalty shall not exceed $10,000 per
violation.
�
Each act or omission that is
found to violate this part shall be considered a separate violation for the
purposes of assessing civil penalties.
�

The commissioner shall issue a written notice to the institution
identifying the violation and the amount of the penalty and informing the
institution of its right to request an administrative hearing on the penalty in
accordance with subsection (g).

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(f)
�

If, after notice and an opportunity for a hearing, the commissioner
finds that an institution has committed a violation of this part, has defied an
order issued by the commissioner, or is conducting its digital asset services
in a manner that poses a significant risk to the safety of customer assets or
to the soundness of the institution, the commissioner may suspend or revoke the
institution's authority to provide digital asset services pursuant to this part.
�
Any notice of intent to suspend or revoke an
institution's authority under this part shall state the grounds for the action
and set a date for a hearing at which the institution may show cause as to why
its authority should not be suspended or revoked.
�
Any suspension or revocation issued pursuant
to this subsection shall become effective only after the institution has been
given notice, an opportunity for a hearing, and a written decision by the
commissioner affirming grounds for the action.

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(g)
�

An institution subject to any final enforcement action, including a
cease and desist order, temporary emergency order, civil penalty, or suspension
or revocation, may request an administrative hearing and judicial review of the
commissioner's decision.
�
Upon timely
request by the institution, the commissioner shall conduct an administrative
hearing no later than seven days after the institution's request has been
received.
�
The institution may present
evidence and argument at the hearing, and the commissioner shall issue a
written final decision based on the record of the proceedings.
�
An institution may appeal a final decision of
the commissioner to a court of competent jurisdiction as provided by law.
�
The filing of an appeal shall operate as an
automatic stay of the commissioner's order, unless the court, upon motion of
the commissioner, finds that the stay would pose a substantial risk to the
public interest.
�
Any appeal filed under
this subsection shall be expedited and given priority on the court's
docket.
�
The reviewing court shall hear
and determine the appeal as promptly as practicable, giving precedence over
other civil matters, except matters of the same character.

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�
412:3-H
�
Construction; applicability.
�
Nothing in this part shall be construed to
alter, diminish, or expand the duties and obligations of banks, credit unions,
or fiduciaries under existing state or federal law, except as expressly
provided in this part."

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SECTION 3.
�

If any provision of this Act, or the application thereof to any person
or circumstance, is held invalid, the invalidity does not affect other
provisions or applications of the Act that can be given effect without the
invalid provision or application, and to this end the provisions of this Act
are severable.

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SECTION 4.
�

In codifying the new sections added by section 2 of this Act, the
revisor of statutes shall substitute appropriate section numbers for the
letters used in designating the new sections in this Act.

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SECTION 5.
�

This Act shall take effect on September 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

DFI; Digital
Asset Banking; Financial Institutions; Regulation

Description:

Authorizes
digital asset banking in the State.
�

Requires the Commissioner of Financial Institutions to adopt and enforce
regulations for digital asset banking.
�

Effective 9/1/2026.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.