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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
financial technology; digital assets program
Purpose
Retitles the Arizona Regulatory Sandbox Program as the Financial Technology, Digital Assets and Blockchain Sandbox Program and modifies the definition of innovation to include digital assets.
Background
The Attorney General (AG) administers and oversees the Arizona Regulatory Sandbox Program, which enables persons to obtain limited access to Arizona's market to test innovative financial products or services or other innovations without obtaining a license or other authorization. An innovation is the use or incorporation of new or emerging technology or the reimagination of uses for existing technology to address a problem, provide a benefit or otherwise offer a product, service, business model or delivery mechanism that is not known by the AG to have a comparable widespread offering in Arizona (A.R.S. §§ 41-5602 and 41-5601).
An applicant must
demonstrate to the AG adequate understanding of the innovation and a sufficient
plan to test, monitor and assess the innovation while ensuring consumers are
protected from a test's failure. Upon application approval, an applicant is
deemed an Arizona Regulatory Sandbox Program participant and given 24 months to
test the innovation. A participant must retain records, documents and data
produced in the ordinary course of business. If an innovation fails before the
end of the testing period, the participant must notify the AG and report on
actions taken to ensure consumers have not been harmed as a result of the
innovation's failure. Before the
24-month testing period ends, a participant must notify the AG that the
participant will exit the Arizona Regulatory Sandbox Program and cease offering
any innovative products or services within 60 days after the 24-month testing
period ends or seek an extension in order to pursue a license or other
authorization required by law (A.R.S. §§ 41-5603;
41-5605;
41-5609;
and
41-5607).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Retitles the Regulatory Sandbox Program as the Financial Technology, Digital Assets and Blockchain Sandbox Program.
2. Defines digital assets as virtual currencies, cryptocurrencies and other digital-only assets that confer economic, proprietary or access rights or powers.
3. Modifies the definition of innovation to include the use of digital assets to address a problem, provide a benefit or otherwise offer a product, service, business model or delivery mechanism that is not known by the AG to have a comparable widespread offering in Arizona.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date.
House Action
COM 2/18/25 DP 9-0-0-1
3rd Read 2/26/25 57-0-3
Prepared by Senate Research
March 13, 2025
MG/AL/ci