California Assembly Passes AB 1180 to Allow Crypto Payments

• Once AB 1180 is passed by the Senate, it will need to be passed by Governor Gavin Newsom, and if it happens so, the bill would come into effect on July 1, 2026.

The lower house of California has passed a bill that allows state departments to accept virtual currencies. Now, the bill, having a unanimous vote, is moved towards the Senate, marking a milestone for the industry.

On June 2, the Assembly Bill 1180 (AB 1180) was passed through the California State Assembly having a 68-0 vote on its third reading, requiring the Department of Financial Protection and Innovation (DFPI) to create regulations allowing state fees and transactions under the Digital Financial Assets Law (DFAL) to be settled through crypto.

DFPI is responsible for keeping an eye on financial services and safeguarding consumers, and at the same time, encouraging responsible innovation. Any person or body operating crypto business activities in the state must get a license from the DFPI.

Once AB 1180 is passed by the Senate, it will need to be passed by Governor Gavin Newsom, and if it happens so, the bill would come into effect on July 1, 2026. As per the sponsor of the bill, the Democratic Assemblymember Avelino Valencia, a pilot program would function till January 1, 2031, before being fully operational.

The Required Report

California follows the path of Florida, Colorado, and Louisiana, which have accepted crypto payments in some areas in the past few years. The bill would also need the DFPI to give a report by January 1, 2028, giving information about all transactions processed.

Along with that, the details will also mention any technical and regulatory challenges experienced. Crypto transactions under DFAL are classified as any digital representation of value that is used as a medium of exchange, but is not legal tender.

AB 1180 witnessed four amendments before finally getting passed by the California Assembly on June 2. The most important prohibition revolved around a section that attempted to define terms associated with ride-sharing companies and personal vehicles used for transportation services.

AB 1180 looks to accompany AB 1052, the Bitcoin rights bill, focusing on laying out crypto self-custody rights. The bill was passed on May 23 in the first assembly committee and is looking for a third reading.