KEY FACTS: The California State Assembly unanimously passed Assembly Bill 1180 (AB 1180) with a 68-0 vote, a legislation allowing state agencies to accept cryptocurrency payments for fees and services, such as taxes and fines, starting with a pilot program in July 2026. Sponsored by Assembly member Avelino Valencia, the bill tasks the California Department of Financial Protection and Innovation with developing regulations to ensure secure transactions, with a report on challenges due by 2028.

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Source: The Seal of California

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California Assembly Unanimously Passes Bill to Allow Cryptocurrency Payments for State Services

The California State Assembly has unanimously passed Assembly Bill 1180 (AB 1180), a bill that paves the way for state agencies to accept cryptocurrency payments for government fees and services. The bill, which passed with a resounding 68-0 vote on June 2, 2025, now advances to the California State Senate for further consideration. If approved by the Senate and signed into law by Governor Gavin Newsom, the legislation could position California as a leader in cryptocurrency adoption within the United States, with a pilot program set to begin in July 2026.

The passage of AB 1180 marks a significant milestone in California’s efforts to integrate digital currencies into its financial ecosystem. Sponsored by Democratic Assembly member Avelino Valencia, the bill authorizes the California Department of Financial Protection and Innovation (DFPI) to develop regulations under the Digital Financial Assets Law (DFAL) to enable state agencies to accept cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) for various transactions, including taxes, fines, and other state fees. The legislation aims to modernize California’s payment infrastructure, aligning it with the growing global adoption of blockchain-based financial systems. Assembly member Valencia made a statement following the vote:

“This is a forward-thinking step for California,”...“By allowing state agencies to accept cryptocurrency payments, we’re not only embracing innovation but also providing residents and businesses with more flexible and efficient ways to interact with their government.”

The unanimous support in the Assembly reflects a rare bipartisan consensus on the potential of cryptocurrencies to enhance financial inclusion and streamline government operations.

AB 1180 outlines a cautious yet progressive approach to integrating cryptocurrencies into state transactions. If passed by the Senate and signed into law, the bill will initiate a pilot program starting July 1, 2026, and running through January 1, 2031. During this period, the DFPI will oversee the development and implementation of rules to ensure the security and efficiency of crypto transactions. The department will also be tasked with tracking all cryptocurrency payments and reporting on regulatory and technical challenges by 2028, providing a comprehensive assessment of the program’s success and scalability.

The pilot program is designed to test the feasibility of cryptocurrency payments in a controlled environment before full implementation. This phased approach addresses concerns about volatility, security, and regulatory compliance, which have historically been barriers to widespread crypto adoption in government settings. By 2031, the state aims to evaluate the pilot’s outcomes and determine whether to make cryptocurrency payments a permanent option for state services.

California’s move to accept cryptocurrency payments follows states like Florida, Colorado, and Louisiana, which have already implemented policies allowing crypto payments for certain state obligations, such as taxes and licensing fees. Additionally, recent legislative developments in New Hampshire and Texas, which have passed bills to establish strategic Bitcoin reserves, emphasize the growing acceptance of cryptocurrencies at the state level.

Unlike Arizona, where Governor Katie Hobbs recently vetoed a bill that would have allowed state agencies to accept crypto payments, California’s unanimous Assembly vote suggests strong political support for digital asset integration. The contrast highlights California’s ambition to lead in financial innovation, leveraging its position as a global hub for technology and blockchain development.

AB 1180 is part of the bigger legislative push in California to establish a crypto-friendly regulatory environment. The bill complements Assembly Bill 1052 (AB 1052), also known as the “Bitcoin Rights” bill, which passed on May 23, 2025. AB 1052 aims to protect the self-custody rights of cryptocurrency holders, ensuring that individuals and businesses can securely manage their digital assets without undue government interference. Together, these bills signal California’s commitment to fostering a robust and inclusive cryptocurrency ecosystem.

The DFPI, which will play a central role in implementing AB 1180, has been tasked with creating a framework that balances innovation with consumer protection. This includes ensuring that crypto transactions are secure, transparent, and compliant with anti-money laundering (AML) and know-your-customer (KYC) regulations. The department’s oversight will be critical in addressing potential risks, such as price volatility and cybersecurity threats, while maximizing the benefits of blockchain technology for state operations.

As AB 1180 moves to the Senate, it faces a rigorous review process. While the unanimous Assembly vote suggests strong momentum, the Senate’s deliberations may raise questions about the bill’s long-term implications. Lawmakers will likely scrutinize the DFPI’s capacity to oversee crypto transactions and the potential risks to consumers and the state’s financial system. Additionally, the bill’s alignment with federal regulations, such as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), could influence its final form.

Meanwhile, recent debates over cryptocurrency legislation at the federal level, particularly concerns about conflicts of interest involving President Donald Trump’s crypto ventures, have created headwinds for crypto-related bills. While AB 1180 is a state-level initiative, its success could depend on navigating these broader dynamics and securing bipartisan support in the Senate.

If signed into law, AB 1180 could transform how Californians interact with their state government, offering a faster, more accessible alternative to traditional payment methods. For businesses and individuals already invested in cryptocurrencies, the ability to pay state fees with digital assets could reduce transaction costs and streamline processes. Moreover, the pilot program’s data-driven approach will provide valuable insights into the practicalities of crypto adoption at the state level, potentially informing federal policy in the years to come.

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Information Sources:

• California Legislative Information
• Bitcoin Laws/ X
• Cointelegraph

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