A recent development in California has seen a bill passed by the State Assembly that could potentially revolutionize the way state departments accept payments. The bill, known as AB 1180, secured a unanimous vote of 68-0 during its third reading in the Assembly.
If enacted, AB 1180 would authorize the Department of Financial Protection and Innovation to create regulations allowing for the acceptance of cryptocurrency payments for state fees and transactions under the Digital Financial Assets Law. This move marks a significant step towards embracing the use of digital currencies in government transactions.
The legislation includes a pilot program that is set to run until January 1, 2031, with full implementation expected to commence on July 1, 2026, pending approval from Governor Gavin Newsom. The DFPI would be tasked with providing a report by January 1, 2028, detailing the number and types of crypto transactions processed during the program, as well as any technical or regulatory challenges encountered.
Under the Digital Financial Assets Law, digital financial assets are defined as any digital representation of value used as a medium of exchange that is not legal tender. By allowing for crypto payments, California aims to align itself with other states like Florida, Colorado, and Louisiana that already permit digital currency transactions for certain government services.
Prior to its approval in the Assembly, AB 1180 underwent several amendments, including the removal of language pertaining to ride-sharing companies and personal vehicles used for transportation services. The bill now focuses solely on digital asset transactions under DFAL.
AB 1180 is expected to complement another crypto-focused bill, AB 1052, which was introduced by Assembly member Avelino Valencia. AB 1052 aims to safeguard the use of digital assets in private transactions and uphold the right to crypto self-custody. The bill has already passed in an Assembly committee and is awaiting its third reading.
In addition to enabling crypto payments for state fees, AB 1052 seeks to prevent public entities from restricting or taxing digital assets solely based on their use as a form of payment. It also includes provisions related to hardware or self-hosted wallets, unclaimed digital property, and the involvement of public officials with digital assets.
The growing interest in crypto policy in California reflects a broader trend of political support for digital assets. State Senator Ben Allen has been a vocal advocate for pro-crypto representation within the government. A recent poll commissioned by Coinbase found that the majority of crypto holders in the state would support candidates with pro-crypto platforms.
Overall, the passage of AB 1180 signifies a significant step towards embracing the use of digital currencies in government transactions in California. As the bill progresses to the State Senate for further consideration, it could pave the way for broader acceptance of crypto payments in the state.