California Moves Closer to Accepting Cryptocurrency for State Payments
California has made significant progress toward integrating cryptocurrency into its state operations. Assembly Bill 1180 (AB 1180), aimed at enabling state departments to accept digital currencies for payments, passed unanimously in the California State Assembly with a 68-0 vote on June 2. The bill now awaits consideration in the state Senate.
AB 1180 mandates the Department of Financial Protection and Innovation (DFPI) to establish regulations that would allow fees and transactions under the Digital Financial Assets Law (DFAL) to be paid using cryptocurrency. The DFPI is the state’s regulatory body responsible for overseeing financial services, protecting consumers, and fostering responsible innovation within the financial sector. Under existing frameworks, any individual or entity conducting crypto-related business in California must obtain a license from the DFPI.
If approved by the Senate and signed into law by Governor Gavin Newsom, AB 1180 would take effect starting July 1, 2026. A pilot program would be launched and run through January 1, 2031, after which the program would become fully operational.
Assemblymember Avelino Valencia, the bill’s sponsor, emphasized that this initiative positions California to potentially join other crypto-forward states such as Florida, Colorado, and Louisiana, where select government entities already accept cryptocurrency for specific payments.
In addition to establishing a legal framework for state crypto transactions, AB 1180 requires the DFPI to submit a detailed report by January 1, 2028. This report must document all crypto transactions processed by state departments, as well as any technological or regulatory hurdles encountered during implementation.
Under the DFAL, crypto transactions are defined as any digital representation of value used as a medium of exchange, though not recognized as legal tender.
Before its passage, AB 1180 underwent four amendments. One of the most notable changes was the removal of language that had sought to define terms related to ride-sharing services and personal vehicle use in transportation.
A Complementary Bill: AB 1052 – “Bitcoin Rights”
AB 1180 also aligns with another pending legislative effort, Assembly Bill 1052, often referred to as California’s “Bitcoin rights” bill. This separate legislation is focused on protecting the self-custody rights of crypto holders in California and ensuring the legal use of digital assets in private transactions.
Passed by an 11-0 vote in its first committee reading on May 23, AB 1052 is currently awaiting a third reading in the Assembly. If enacted, it would legally recognize the use of digital assets in private transactions and prevent public agencies from imposing taxes or restrictions based solely on a digital asset’s use as a payment method.
As the state continues to explore crypto adoption, recent data from BTC Maps shows that at least 117 merchants in California already accept Bitcoin payments, indicating growing mainstream acceptance.
Read Also: Singapore Orders Crypto Firms to End Overseas Operations by June 30
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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