Key Points
- The California State Assembly has approved a bill to allow state agencies to accept cryptocurrency payments.
- The bill, AB 1180, will now move to the Senate for further consideration.
The California State Assembly has given unanimous approval to a groundbreaking bill. This bill, if passed, would allow state agencies to accept payments in the form of cryptocurrency.
California’s Progressive Move with AB 1180
The bill, known as Assembly Bill 1180 (AB 1180), received a 68-0 vote and will now proceed to the Senate for further scrutiny. The bill was initiated by Democratic Assembly member Avelino Valencia and aims to establish an innovative pilot program. This program would pave the way for digital currencies to be used for state fees and transactions.
Additionally, the bill requires the Department of Financial Protection and Innovation (DFPI) to create regulatory guidelines under the Digital Financial Assets Law (DFAL). These guidelines would facilitate the implementation of this new payment method.
Implications of the Bill
The bill stipulates that the DFPI must submit a comprehensive report to the legislature by 01 January 2028. This report should contain information on cryptocurrency transactions, any technical difficulties encountered, and recommendations for expanding the adoption of digital asset payments across other state agencies.
The bill also includes a sunset clause, which means it will automatically cease to exist on 01 July, 2031, unless it is renewed. Unlike previous attempts like AB 953 in 2019 and SB 1275 in 2022, AB 1180 targets a smaller group of regulated payees, focusing mainly on businesses involved in cryptocurrency activities.
California is not the first state to consider accepting cryptocurrency payments. It follows in the footsteps of Florida, Colorado, and Louisiana, which have already permitted the use of crypto for certain obligations. At present, approximately 117 merchants in California accept Bitcoin (BTC) payments, indicating a growing adoption of this payment method.
This move is a testament to the increasing national attention that cryptocurrency use is garnering. This has been particularly noticeable after former President Donald Trump expressed his support for Bitcoin reserves. A number of states, including New Hampshire, Arizona, and Texas, have passed legislation to establish state Bitcoin reserves. However, others such as Florida, South Dakota, and Wyoming have rejected similar bills.
In the midst of this growing enthusiasm, Coinbase founder Brian Armstrong has warned that the rising fiscal debt could position Bitcoin to become the world’s next reserve currency.
