California Assembly Unanimously Backs Crypto Payments Bill—A Revolution for Government Digital Finance?

The California State Assembly has approved Assembly Bill 1180 with a unanimous vote. The vote, held on June 2 passed with 78 Assembly Members voting in favor, zero opposed, and one not voting.

Notably, the bill authorizes the Department of Financial Protection and Innovation (DFPI) to create a pilot program for using digital financial assets to pay state fees.

California Assembly Advances AB-1180: Pioneering Crypto Payments and Licensing Framework

During the Assembly floor session, Assembly member Avelino Valencia, who introduced the bill, emphasized the bill’s innovative approach.

“I proudly rise to present AB 1180 that would establish a pilot program authorizing the Department of Financial Protection and Innovation (DFPI) to allow for the payment of fees using digital financial assets,” he said.

He added that the initiative marks a turning point for public sector adoption of financial technologies, noting his connection to the field as a student during its early development.

Further explaining, AB-1180 mandates that DFPI submit a detailed report to the Legislature by January 1, 2028.

The report must cover the volume and value of crypto transactions, regulatory challenges, and recommendations for future integration across more government agencies. Notably, the bill is set to sunset on July 1, 2031.

The bill also establishes the Digital Financial Assets Law (DFAL), creating a licensing and regulatory structure for digital asset activities.

Starting July 1, 2025, individuals must obtain a DFPI license to engage in crypto business within the state. Consumer protections, disclosure rules, and stablecoin regulations will also take effect on that date.

The AB-1180, which has now advanced through three primary stages in the Assembly, recorded no opposition.

On April 21, the bill was approved by the Assembly Banking and Finance Committee with a 9-0 vote. It then moved to the Assembly Appropriations Committee, which passed 14-0 on May 23, with one member not voting.

Interestingly, AB-1180 does not mandate the use of cryptocurrency. Instead, it authorizes the DFPI to assess, develop, and prepare for potential digital payment systems.

These systems could include crypto-based technologies, offering the state new tools for handling payments securely and efficiently. The bill positions California to evaluate the role of digital assets in state financial operations better.

Comparisons With Previous Bills

Previous attempts to legislate crypto payments in California failed. One such attempt was AB 953, which aimed to let licensed cannabis businesses pay taxes using stablecoins. However, that bill was amended and shifted focus to unrelated land use issues.

Similarly, AB 3090, which required a report on how cannabis taxes could be collected via stablecoin, did not advance.

SB 1275, which would have allowed broader digital asset payments for government services, also failed in the Senate.

Meanwhile, AB 39 mandated companies to disclose various fees before engaging in digital financial asset activities with any California resident.

However, with full Assembly approval for the AB 1180, the bill now heads to the California Senate for consideration. If passed, the DFPI will lead a pilot program that could reshape how residents interact with the government financially.

Assembly member Valencia believes the legislation aligns with consumer trends, citing states like Colorado, Utah, and Louisiana already allowing crypto payments for certain services.

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