California bans politicians’ memecoins with new bill

California is taking a clear stance against memecoins from politicians. The state legislature has passed bill AB 2409, which prohibits government officials and government personnel from issuing memecoins. The proposal is now with the governor for signature. If the law is enacted, the rules will come into force on 1 January 2027.

In short:

• California wants to prohibit government officials from issuing or promoting memecoins.
• From 2027, digital asset service providers will no longer be allowed to offer memecoins from politicians to California residents.
• The bill is now awaiting the governor’s signature.

What exactly does the bill prohibit?

Bill AB 2409 is aimed at both federal and local government officials. They may no longer issue memecoins, and from 1 January 2027 digital asset service providers may no longer offer memecoins to California residents when those coins have been issued by or in collaboration with a government official.

The bill defines a memecoin as a digital asset that is primarily marketed or recognised on the basis of its association with internet memes, public figures, fictional characters, animals, current events, humour, celebrities or social trends, and whose value derives mainly from public interest, speculation or community involvement.

Prompted by Trump memecoins

The bill did not come out of thin air. The launch of memecoins by President Donald Trump and his inner circle sparked widespread political opposition in the US. Critics argue that politicians who issue their own digital coins gain a direct financial interest in the regulations they themselves influence.

California is not the first level of government to address this issue in legislation. The US Congress is also discussing rules that would prohibit politicians from profiting from crypto projects. However, the California proposal goes further by also directly prohibiting service providers from offering such coins to state residents.

Governor decides on the law

The bill is now in the so-called enrolled phase, which means it has passed through the legislature and is now officially with the governor. The governor can sign the proposal, after which it becomes law, or block it through a veto.

If the law is enacted, California would be the first US state with an explicit ban on memecoins from government officials. The entry into force on 1 January 2027 gives digital asset service providers time to adjust their offerings to the new rules.