Digital financial assets: stablecoins.

Senator Grayson's digital financial assets legislation refines California's regulatory approach to stablecoins while exempting in-game digital assets from state oversight. The bill removes digital representations of value used within online games and gaming platforms from the definition of regulated digital financial asset business activities, allowing game developers to operate without meeting digital asset licensing requirements.

The legislation expands the criteria that the Commissioner of Financial Protection and Innovation must evaluate when approving stablecoins for use in California. These new factors include examination of holder redemption rights, quality of backing assets, collateralization requirements, and technical security measures such as code audits and automated settlement mechanisms. The Commissioner retains authority to impose licensing requirements on stablecoin issuers and may revoke approvals if market conditions change or if issuers engage in misleading marketing practices.

The Department of Financial Protection and Innovation must publicly disclose approved stablecoins on its website. The changes take effect alongside California's broader digital financial assets regulatory framework, which begins implementation in July 2026.