Memin: California passes law prohibiting public officials from issuing coins

California has taken a critical step in regulating memecoins and digital assets associated with elected officials

Bill AB2409, proposed by Avelino Valencia, clarifies the different rules that apply to public officials and digital service providers. After the bill was passed by the Senate on August 26, the House unanimously approved the amendment. The bill currently needs to complete final procedures before it can be submitted to Governor Gavin Newsome for review. Its core goal is to restrict the issuance of tokens by certain people exercising public power in California.

Ban on public officials

The California Senate passed Bill AB 2409, which aims to ban public officials from issuing derivative currencies. The House unanimously approved the Senate amendment with a vote of 78 to 0, which will then be submitted to Gov. Gavin Newsome for consideration. The measure targets elected officials and some public officials, especially those with decision-making power in contracts and tenders. The bill aims to prevent conflicts of interest, corruption risks and circumvention of financial transparency rules.

Specific content of the ban

Bill AB 2409 proposes to prohibit any public official or relevant public sector employee from issuing derivative currencies. The rule mainly targets memes-a violation when a public official offers tokens in exchange for value. The bill defines "issuance" as any provision of tokens by purchase, gift, or exchange, even if there is no project promotion. The bill's definition of "public official" includes elected or appointed persons at the state and local government levels, including members of the California Legislative Assembly, as well as members of committees, councils, and advisory committees. As a result, memes are not the only target, and the measure targets derivative currencies more broadly. Provisions covering public employees are narrower and apply only to employees of government agencies who have decision-making power in tendering and contracts. The bill would add these bans to the California government code section prohibiting digital financial transactions.

Designed to limit conflicts of interest

California lawmakers defended the restriction on the grounds of public power. According to the content of the bill, public officials should not use their positions for personal gain. Issuing or promoting memoin may raise conflicts of interest and corruption risks, and the clause also mentions issues of exploitation and foreign interference. Avelino Valencia elaborated on this logic as early as April this year when the bill was reviewed by the House Banking and Finance Committee. He pointed out that relevant platforms have made the creation of meme-based cryptocurrencies extremely convenient, and this convenience may allow ill-intentioned people to circumvent existing rules on financial transparency and conflicts of interest. In this context, memoin has become a specific case in the debate on the political use of digital assets. However, the law does not only address meme-inspired tokens, its mechanism is based on the identity of the issuer and the public powers it possesses. Therefore, the bill aims to regulate the relationship between public services, digital transactions and financial interests.

Vote paves the way for governor's review

The California Senate passed AB 2409 on August 26. Subsequently, the House approved the Senate amendment with a vote of 78 to 0. The bill has since entered the final stage of finalization and now needs to be submitted to Governor Gavin Newsome for signature. This is a time when some memes related to public officials are causing losses. A report estimates that investors in official Trump tokens lost as much as $3.2 billion, most of which may have not yet been disclosed. According to data, Trump tokens rank fifth among memes, with a market value of US$688 million. In the most recent week, the token has risen 53%, after falling 67% in the previous year. The Trump family's activities in the cryptocurrency field have also posed challenges to the U.S. Clarification Act. A bipartisan, non-public ethics amendment could allow Trump to defer paying capital gains taxes on income from mandatory sales. Everything depends on the governor's review and subsequent final procedures. If the bill goes smoothly, California will specifically ban public officials from issuing memes. Bill AB 2409 will strengthen cryptocurrency regulation by delineating the boundary between public services and digital currency issuance. Its subsequent direction will show how the state regulates these tools in the future.