California Crypto Payments: Historic Bill AB 1180 Passes Assembly Unanimously

California is taking a significant step towards embracing digital assets. A recent bill proposing that state agencies accept cryptocurrency for various payments has cleared a major hurdle, passing the State Assembly with overwhelming support. This move signals a growing acceptance of digital currencies within governmental structures and sets the stage for potential widespread California crypto payments.

Understanding AB 1180: The California Crypto Bill

The legislation at the heart of this development is Assembly Bill 1180, also known as AB 1180. This bill proposes a framework that would permit California state departments to accept digital currencies for specific fees and transactions. It successfully navigated its third reading in the California State Assembly on June 2nd, receiving a unanimous 68-0 vote. This strong bipartisan support highlights the potential perceived benefits of integrating digital assets into state operations.

What Does AB 1180 Mandate?

If enacted, AB 1180 would task the Department of Financial Protection and Innovation (DFPI) with a crucial role. The bill requires the DFPI crypto rules to be developed specifically for implementing these crypto payment options under the existing Digital Financial Assets Law (DFAL). The DFPI is the state body responsible for overseeing financial services, protecting consumers, and fostering responsible innovation in the financial sector. Entities conducting crypto business in California are already required to obtain a license from the DFPI.

Key aspects outlined in the bill include:

• Requiring the DFPI to establish rules for accepting digital currencies for state fees and transactions under DFAL.
• Defining crypto transactions under DFAL as digital representations of value used as a medium of exchange, excluding legal tender.
• Setting a potential effective date of July 1, 2026, if the bill passes the Senate and is signed by the Governor.
• Establishing a pilot program intended to run until January 1, 2031, before potentially becoming fully operational.

Driving State Crypto Adoption

This legislative effort positions California to potentially join a growing list of states exploring or already implementing mechanisms for accepting crypto payments. States like Florida, Colorado, and Louisiana have previously moved to allow crypto for certain obligations. California’s large economy and population make this potential step towards State crypto adoption particularly significant for the broader digital asset ecosystem.

Reporting and Future Steps for California Crypto Payments

The bill includes a requirement for the DFPI to submit a report by January 1, 2028. This report would detail all crypto transactions processed under the new system and outline any technical or regulatory challenges encountered during the implementation. This data will be crucial for evaluating the success and feasibility of accepting California crypto payments on a larger scale.

Before reaching the Assembly floor, AB 1180 underwent four amendments. Notably, a section attempting to define terms related to ride-sharing services was removed during this process.

Complementary Legislation: AB 1052 and Bitcoin Rights

AB 1180 is designed to work alongside another important piece of proposed legislation, AB 1052, often referred to as California’s “Bitcoin rights” bill. AB 1052 focuses on establishing self-custody rights for digital assets for the state’s residents. This bill also saw positive movement, passing its first assembly committee unanimously and being ordered to a third reading.

AB 1052 also aims to validate the use of digital financial assets as legal payment in private transactions and seeks to prevent public entities from restricting or taxing digital assets solely based on their use as payment. This dual legislative approach signals a broader effort within California to both enable government interaction with crypto and protect individual rights regarding digital asset ownership and use.

Conclusion: A Positive Outlook for California Crypto Payments

The unanimous passage of AB 1180 through the California State Assembly marks a pivotal moment for State crypto adoption. While the bill still needs to clear the Senate and receive the Governor’s signature, the strong initial support is a positive indicator. If signed into law, the requirement for the DFPI crypto rules development and the planned pilot program will pave the way for citizens and entities to potentially make California crypto payments for state services in the coming years. This legislative progress, combined with efforts like AB 1052, suggests California is actively exploring ways to integrate digital assets into its financial and legal frameworks, potentially setting a precedent for other states.