House committee substitute to the 2nd edition makes the following changes.

Part I.

Amends GS 53-441 by amending the definition of digital assets currency services to include custody of digital assets on behalf of customers by a financial institution.

Amends GS 53-442(g) by specifying that the requirement that a financial institution make the results of each annual audit available to customs when requested, is subject to redaction of sensitive or proprietary information.

Amends GS 53-444 as follows. Provides that a financial institution may include a customer's digital assets in its staking program only if instructed by the customer (was, unless otherwise instructed by the customer, a financial institution may include a customer's digital assets in its staking program by default, so long as the customer has been given the required disclosures and an opportunity to opt out). Makes a conforming deletion of provisions on automatic staking and opt-out.

Amends GS 53-446 by limiting the requirements related to anti-money laundering compliance programs, written cybersecurity program, specified record keeping, and designation of program oversight personnel only to financial institutions offering digital asset services. Also makes the provisions related to notifying the regulating authority of any material cybersecurity incident applicable to financial institutions offering digital asset services and also as soon as possible, but in no event later than 72 hours after determining that the incident has occurred (was, 72 hours after discovering the incident).

Amends GS 53-449 by limiting the authority of the State Banking Commission and Credit Union Commission to adopt rules to implement, clarify, and enforce the requirements of the Article, so that no rule can imposes a requirement on a digital asset activity that is more restrictive than applicable federal law governing the same activity.

Enacts new GS 53-450 to allow a financial institution to engage in any digital asset activity that is authorized for the institution under applicable federal law. Provides that to the extent a provision in this Article is more restrictive than the requirements imposed on that activity under applicable federal law, the federal requirement governs. Provides that this does not limit the regulating authority's power to examine the financial institution, to enforce State consumer protection laws of general applicability, or to take action against unsafe or unsound practices. Renumbers the remaining statutes accordingly.

Amends the civil penalties provision in GS 53-451 (was, GS 53-450) by specifying that aggregate technical or software errors resulting in no loss are a single violation. Adds that except in the case of a temporary emergency order, before assessing a civil penalty, the regulating authority must provide the financial institution with a written notice of violations. Requires the notice to include the nature of the violation and give no less than 30 days to cure the violations. Prohibits issuing a civil penalty if the institution shows to the satisfaction of the regulating authority that the violations have been cured within the specified timeframe.

Enacts new GS 54-452 making all applications, information, reports, and other confidential supervisory information obtained by the regulating authority under this Article, not public records requires that they be kept confidential.

Amends GS 116B-53 by amending two of the three dates for determining the presumption that property held in a digital asset account to be presumed to be abandoned after five years to include attempts at electronic communication.

Amends GS 116B-60 by specifying that the report filed by a holder of property presumed abandoned is to be filed with the Treasurer.

Part II.

Amends GS 53-463 to allow a State chartered insured depository institution or State chartered insured credit union to issue payment stablecoins only through a subsidiary that is a licensed or authorized (was, licensed) stablecoin issuer.

Amends GS 53-465 to make any request for a temporary extension to the redemption period when there is significant market stress or a redemption spike, subject to the following: (1) limits the extension to five business days; (2) the Commissioner must issue the extension by written order setting forth specific findings of fact supporting the determination of significant market stress or a redemption spike and stating the duration of the extension; (3) the written order must be made available on the publicly accessible website of the Commissioner no later than the close of the business on the day the order is issued. Requires the order to remain publicly available for no less than six months.

Amends GS 53-468 by exempting from public records a stablecoin issuer audit findings, and digital asset logs, requiring that these items be kept confidential. Makes conforming changes to include authorized stablecoin issuers in the criminal provisions. Amends the misdemeanor so that it is now a Class 1 misdemeanor for a person to knowingly and willingly issue or purport to issue a payment stablecoin in this State without the required license or authorization or in violation of a cease and desist order.