The California Legislature unanimously passed AB 1180. This is a bill that will allow state agencies to begin accepting Bitcoin and other digital assets as payments for certain regulatory fees.
Written by Congressional member Avelino Valencia (D-Anaheim), the law cleared the floor of Congress on June 3 with a decisive 78-0 votes (2 NVs) and is currently under review by the Senate Rules Committee.
If enacted, the bill would require California’s Department of Financial Protection and Innovation to develop rules that allow businesses regulated under the state’s Digital Financial Assets Act to use digital assets to pay screening fees. The pilot program will begin on July 1, 2026 and will run until January 1, 2031.
“AB 1180 places California at the forefront of digital assets innovation,” Valencia said at a previous committee hearing. “It serves as a blueprint for statewide integration.”
Keep track of the encrypted state
The California push follows in the footsteps of Colorado, Utah and Louisiana, which have already accepted crypto payments for certain government services.
For example, Colorado allows crypto tax payments via PayPal’s services, charging users 1.83% to 1.83% per transaction.
Similar to that model, the California system converts digital payments to US dollars at receipts, avoiding direct exposure to volatility in the state’s crypto market.
The program is designed as a five-year testbed. By January 2028, DFPI must submit an interim report assessing the effectiveness of the system, operational costs, risk of fraud or abuse, and public feedback.
If successful, pilots can pave the way for wider acceptance of cryptography in agencies in other states.
Strategic implications for California’s crypto ecosystems
The passage of the bill is particularly relevant to the state’s burgeoning crypto sector. California has major blockchain companies such as Ripple, Solana Labs and Kraken, many of which require you to navigate complex and expensive regulatory licensing processes.
By enabling cryptocurrency payments, states can streamline compliance for these companies and demonstrate their openness to innovation in financial services.
Crypto payment processors such as BitPay, Coinbase Commerce, and PayPal are potential candidates for advantageous state contracts. The exact provider is determined through a procurement process led by DFPI.
However, not everyone is on board. Consumer advocacy groups and the Financial Watchdog raised concerns about crypto mining transaction fees, volatility and environmental footprint. Lawmakers suggest that the Senate may implement consumer protection modifications, such as fee caps and refund mechanisms, to address these risks.
Political momentum over crypto rights
The bill is part of Valencia’s broader legislative push, which also advances AB 1052, the so-called “Bitcoin rights” bill aimed at enhancing self-advising, node manipulation, and peer-to-peer transactions protection in state law. The action, supported by the National Crypto Advocacy Group Group Satoshi Action Fund, places California as a counterweight to federal regulations’ ambiguity.
“If Bitcoin rights pass here, they can go anywhere,” Dennis Porter, CEO of Satoshi Action Fund, said in an interview with Politico.
The Senate is expected to occupy AB 1180 later this summer. If Gov. Gavin Newsom passes and signs, DFPI began developing the Crypto Payment System in 2026, and by the end of the decade it has turned its eye on statewide deployment.
This experiment could well shape the future of finances not only in California but across the country. As Valencia said, “California can’t afford to be late.”
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