California Advances Crypto Bill to Enable State Payments in Digital Currency

Highlights:

• The California Assembly has passed a bill to let state agencies accept digital currency for public services.
• The crypto bill will create a pilot program and will set rules for safe digital payments in government services.
• A second bill is set to protect the right to use and store digital assets without extra rules or payment bans.

The California State Assembly has passed Assembly Bill 1180, which allows state agencies to accept payments in digital currencies. Lawmakers voted 78-0 in favor of the bill on June 2, showing strong bipartisan support. Assemblymember Avelino Valencia introduced the bill, which now moves to the State Senate for review. If approved and signed into law by Governor Gavin Newsom, the measure will take effect on July 1.

California approved a bill to accept crypto for state payments pic.twitter.com/mRN88VjgYy

— InstitutionalFi (@InstitutionalFi) June 4, 2025

The Department of Financial Protection and Innovation (DFPI) will handle the program and decide on rules for digital asset payments. These guidelines have to be consistent with the rules in California’s Digital Financial Assets Law. DFPI will take care of the safety of online transactions and guide how digital payments are managed. The purpose is to introduce modern ways of paying for state services without removing the current ones.

Crypto Bill Sets Framework for Public Sector Adoption

AB 1180 sets up a pilot program that will continue until January 1, 2031. At this time, the DFPI will permit certain government services to receive digital currency payments. The department should provide a report on how the program is functioning by January 1, 2028. The report shall show the total number and types of digital transactions, point out any technical problems, and include information on legal aspects.

The bill defines digital financial assets as digital units of value that function as a medium of exchange but are not issued by a government. Examples include cryptocurrencies like Bitcoin and other blockchain-based tokens. Lawmakers removed language from earlier drafts that dealt with ride-share services and personal vehicles. As a result, the current version focuses entirely on public payment use cases and avoids unrelated topics.

Other states have also taken steps toward digital currency use in public services. For example, Colorado, Louisiana, and Florida already allow crypto payments for certain transactions. If California’s plan succeeds, it could influence additional states to develop similar programs. This shows a broader trend toward exploring digital currency at the state level.

Bitcoin Rights Effort Gains Ground in California

In addition to AB 1180, Assembly member Valencia introduced Assembly Bill 1052 to protect the right to use digital assets in private payments. This bill passed an Assembly committee on May 23 with an 11-0 vote. The proposal would stop state and local governments from banning or taxing digital assets based solely on their use as a payment method. It also supports the right to self-custody, allowing individuals to store their digital assets in personal wallets.

The bill sets clear limits that prevent government agencies from restricting the use of private crypto wallets or hardware devices. It also includes rules for handling unclaimed digital assets and outlines how public officials should manage them. Together, AB 1180 and AB 1052 form a complete approach to digital currency in California. One bill focuses on government payments, while the other secures individual rights.

Currently, only 117 California merchants accept Bitcoin, according to BTC Maps. However, with both bills in progress, interest in digital currency adoption could increase. These efforts could make California one of the leading states in digital payment innovation.