California Approves Bill to Accept Crypto for State Payments

     

Bill passes Assembly unanimously, moves to Senate for review.

California is one step closer to integrating crypto into state-level operations after lawmakers in the State Assembly unanimously approved a bill allowing digital assets to be used for state payments.

Assembly Bill 1180 (AB 1180) passed the Assembly on June 2 with a 68-0 vote during its third reading. The proposal now moves to the state Senate for further consideration.

If enacted, the bill would direct California’s Department of Financial Protection and Innovation (DFPI) to establish regulations enabling payments for fees and transactions under the Digital Financial Assets Law (DFAL) to be made in cryptocurrency.

The DFPI serves as the state’s financial regulatory body, overseeing consumer protection and innovation in financial services. Anyone conducting crypto-related business in California must obtain a license from the DFPI.

Should the Senate approve AB 1180 and Governor Gavin Newsom sign it into law, the bill would go into effect on July 1, 2026.

The legislation includes a pilot phase set to run through January 1, 2031. According to bill sponsor Assemblymember Avelino Valencia, this trial period will allow time to evaluate the new payment model.

If passed, California would join states such as Florida, Colorado, and Louisiana, which already permit some government payments in cryptocurrency.

The bill mandates that the DFPI submit a report by January 1, 2028, documenting crypto transactions processed and outlining any technical or regulatory issues faced during implementation.

Crypto under DFAL is defined as any digital representation of value used as a medium of exchange, though not considered legal tender.

AB 1180 underwent four amendments before passing, including the removal of a section that addressed ride-sharing services and personal vehicles used for transportation.

“Bitcoin Rights” Legislation Advances Alongside Crypto Payment Bill

AB 1180 complements a related proposal, Assembly Bill 1052, known as the “Bitcoin rights” bill, which seeks to protect crypto self-custody rights for California’s nearly 40 million residents.

AB 1052 passed its initial Assembly committee with an 11-0 vote on May 23 and is now scheduled for a third reading.

The measure would recognize digital financial assets as lawful payment in private transactions and block public institutions from restricting or imposing taxes on digital assets solely for their use as payment.

Data from BTC Maps indicates that 117 merchants in California currently accept Bitcoin payments.