California lawmakers have approved AB 2409, a measure that would prohibit state and local public officials from issuing meme coins and place limits on how certain official-linked tokens can be offered to California residents through digital asset platforms.

The bill has passed both the Senate and Assembly and now goes to Governor Gavin Newsom. If signed, it would create a state-level restriction aimed specifically at tokens tied to public officials rather than imposing a broader ban on meme coin trading.

What the bill would prohibit

AB 2409 would bar California public officials from issuing a meme coin. Under the bill, a meme coin is defined as a token made available for public purchase, donation or exchange for anything of value, whether or not it is promoted.

The measure applies broadly across state and local government. It covers elected and appointed officials as well as government boards, commissions, committees and advisory bodies. It also extends to public employees who have decision-making authority over bids and contracts.

Rules for digital asset platforms begin in 2027

A separate part of the bill addresses digital asset service providers. Starting Jan. 1, 2027, a platform would be prohibited from listing for sale on behalf of, or for purchase by, a California resident a meme coin issued on or after that date if the token is offered by, or in partnership with, a federal public official or a state or local public officer.

The restriction is narrower than a general crackdown on meme coins. Based on the bill text described in the report, it applies only to official-linked meme coins issued from 2027 onward, not to all meme coins or all crypto trading activity in the state.

How enforcement would work

Enforcement under AB 2409 would take place through civil actions rather than criminal penalties. The California Attorney General would be able to seek injunctions and disgorgement under the measure.

At the local level, district attorneys, city attorneys and county counsels would also have authority to enforce the prohibition on public officials issuing meme coins.

Next step is the governor’s decision

With both chambers of the legislature having passed the bill, AB 2409 now awaits consideration by Governor Gavin Newsom.

If the governor signs the measure, the platform-related restrictions would take effect on Jan. 1, 2027. As reported, the bill is designed to target meme coins linked to public officials while leaving broader meme coin trading outside its scope.

Source: crypto.news