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A California bill aimed at enabling state departments to accept cryptocurrency payments has successfully passed the State Assembly with a unanimous vote, marking a significant step forward for digital asset adoption in government services.

Assembly Bill 1180: A Breakthrough in Crypto Legislation

On June 2, California lawmakers approved Assembly Bill 1180 (AB 1180) with a 68-0 vote during its third reading. Introduced by Assembly member Avelino Valencia, the bill will now move to the State Senate for further deliberation. If enacted, this legislation would empower the Department of Financial Protection and Innovation (DFPI) to create regulations allowing state fees and transactions to be paid in digital currencies under the Digital Financial Assets Law (DFAL).

Proposed Timeline and Pilot Program

The bill outlines a pilot program scheduled to run until January 1, 2031. Full implementation of the program is expected to begin on July 1, 2026, pending approval by Governor Gavin Newsom. During the pilot period, the DFPI would handle the operational and regulatory framework for accepting crypto payments.

Under AB 1180, the DFPI will also be required to submit a report by January 1, 2028. This report will detail the number and types of cryptocurrency transactions processed as well as any technical or regulatory challenges encountered during the program. Such data will provide valuable insights into how digital assets can be integrated into public sector operations.

Definition of Digital Financial Assets

According to the proposed bill, “digital financial assets” refer to any digital representation of value used as a medium of exchange that is not considered legal tender. This definition aligns with industry standards and ensures clarity for regulatory purposes.

California’s Push for Crypto Adoption

California aims to join other states, such as Florida, Colorado, and Louisiana, which already allow cryptocurrency payments for specific government services. This move reflects the state’s growing interest in leveraging blockchain technology and digital currencies to modernize its financial infrastructure.

Key Amendments to the Bill

AB 1180 underwent several amendments before passing the Assembly. One notable revision removed provisions related to ride-sharing companies and personal vehicles used for transportation services. This change narrowed the bill’s focus exclusively to digital asset transactions under the DFAL framework, ensuring a more streamlined approach to crypto adoption.

Complementary Legislation: AB 1052

AB 1180 is closely tied to another crypto-focused bill, Assembly Bill 1052 (AB 1052), also introduced by Valencia. AB 1052 seeks to protect the use of digital assets in private transactions and uphold the right to crypto self-custody. On May 23, AB 1052 passed an Assembly committee with an 11-0 vote and is now awaiting its third reading.

If passed, AB 1052 would prohibit public entities from restricting or taxing digital assets based solely on their use as a form of payment. The bill also includes provisions to prevent limitations on hardware wallets or self-hosted wallets and addresses issues related to unclaimed digital property and public officials’ involvement with cryptocurrencies.

Growing Political and Public Support

California’s interest in crypto policy is gaining momentum, driven by increasing political and public support. State Senator Ben Allen and other lawmakers have been vocal advocates for pro-crypto policies, emphasizing the importance of fostering innovation in the digital asset space.

Public sentiment also appears to be shifting in favor of cryptocurrency. A February survey revealed that nearly four out of five crypto holders in California would support candidates with pro-crypto platforms, highlighting the electorate’s growing enthusiasm for digital assets and blockchain technology.

What This Means for Crypto Adoption

The passage of AB 1180 in the State Assembly represents a promising step toward broader cryptocurrency adoption in California. If the bill becomes law, it could pave the way for other states to follow suit, further solidifying the role of digital assets in the U.S. economy.

As California continues to explore innovative ways to integrate cryptocurrency into its financial systems, the state is positioning itself as a leader in digital asset regulation and adoption.

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