The Graph (grt) 
“`html
An amended California bill aiming to establish legal protections for digital asset payments and self-custody is awaiting its first reading in the state legislature. The proposed legislation, Assembly Bill 1052 (AB 1052), was recently revised by Avelino Valencia, chair of California’s Banking and Finance Committee, to better address the growing influence of cryptocurrency in the state.
Key Changes to AB 1052
The bill, initially titled the “Money Transmission Act,” has been renamed “Digital Assets” to reflect its broadened scope. The revised legislation introduces a set of protections and regulations designed to support the use of cryptocurrencies in California.
Legalizing Crypto Payments
If passed, AB 1052 would make it legal for individuals and businesses in California to accept payments in digital financial assets for goods and services. The bill explicitly states that digital assets used in private transactions will be recognized as “valid and legal consideration.” This move could pave the way for wider adoption of cryptocurrency in everyday commerce.
At the same time, public entities would be prohibited from imposing restrictions or taxes on crypto use solely because of its status as a payment method. However, the legislation makes it clear that state and local governments are not required to accept digital assets as payment themselves.
Protections for Self-Custody
AB 1052 also includes provisions to safeguard the right to self-custody digital assets. It prohibits public entities from imposing restrictions or setting requirements on the use of hardware wallets or self-hosted wallets. This measure ensures individuals retain control over their private keys and digital assets without interference.
Unclaimed Property and Digital Assets
The bill addresses unclaimed property laws as they relate to digital assets. If a digital asset account remains inactive for three years, the assets would “escheat to the state.” In such cases, holders would be required to transfer the assets to a state-designated custodian. This provision aligns digital assets with existing rules for other types of unclaimed property.
Preventing Conflicts of Interest
To avoid conflicts of interest, the bill proposes amendments to California’s Political Reform Act. Public officials would be prohibited from issuing, sponsoring, or promoting any digital asset, security, or commodity. Additionally, they would be barred from engaging in transactions that could create conflicts with their public duties. These measures aim to foster transparency and trust in the state’s approach to cryptocurrency regulation.
Crypto Momentum in California
AB 1052 is part of a larger trend of growing political support for cryptocurrency in California. As digital assets continue to gain mainstream acceptance, lawmakers aim to create a balanced regulatory framework that encourages innovation while protecting consumers and businesses.
According to a recent study conducted on behalf of a major cryptocurrency exchange, nearly 80% of California crypto holders would back a pro-crypto political candidate. This highlights the increasing importance of digital assets in shaping public policy and political campaigns within the state.
AB 1052, introduced in February 2023, is currently in the desk process and will proceed to its first reading in the California State Assembly. Its progress will be closely watched by crypto enthusiasts, investors, and businesses eager to see how the state integrates digital assets into its legal framework.
“`
