The California State Assembly unanimously passed Bill 1180 (AB 1180). This bill aims to allow the state to accept payments using digital assets.
The bill seeks to position California as a leader in digital asset innovation. It also serves as a testing ground for expanding cryptocurrency payment systems.
California Promotes State Payments Based on Cryptocurrency
The bill passed the State Assembly with a decisive vote of 68-0 and will now move to the California Senate for further review. Democratic Assemblymember Abelino Valencia, who led the initiative, introduced AB 1180 in the State Assembly. He described it as the "first pilot program".
"I am proud to announce AB 1180, establishing a pilot program that authorizes the Department of Financial Protection and Innovation to pay fees using digital financial assets." – Assemblymember Valencia stated.
AB 1180 requires the Department of Financial Protection and Innovation (DFPI) to create regulations allowing state payments under the Digital Financial Assets Law (DFAL). These regulations will enable payments using cryptocurrency.
The bill mandates that the DFPI submit a report to the legislature by January 1, 2028. This report will include data on cryptocurrency transactions, technical issues, and recommendations for expanding digital asset use across other state agencies. The bill is scheduled to terminate on July 1, 2031.
Unlike previous attempts to implement cryptocurrency payments, such as AB 953 (2019) and SB 1275 (2022), AB 1180 primarily focuses on small regulatory targets primarily dealing with cryptocurrency businesses.
"This provides an opportunity to identify potential concerns when deploying this payment option." – As stated in the bill.
The bill has also received support from the California Blockchain Advocacy Coalition. If approved by the Senate and signed by Governor Gavin Newsom, AB 1180 could position California as a pioneer in integrating cryptocurrency into state financial systems, potentially setting a precedent for other states nationwide.
This follows efforts by other states like Florida, Colorado, Louisiana, and Utah that are already accepting cryptocurrency payments.
Meanwhile, the progress of AB 1180 is occurring amid increasing institutional interest in cryptocurrency in California. BeInCrypto reported that the state is the largest investor in MicroStrategy stocks, a company famous for its substantial Bitcoin holdings under founder Michael Saylor.
California's public pension funds, CalSTRS and CalPERS, hold a $276 million stake in MSTR. This investment highlights California's expanded engagement with digital assets and reflects a broader recognition of cryptocurrency as a legitimate financial tool.
