California has taken a step closer toward embracing crypto after a bill allowing state departments to accept digital currencies sailed through the state’s lower house with a unanimous vote and is now headed for the Senate.

Assembly Bill 1180 (AB 1180), which passed the California State Assembly on June 2 with a 68-0 vote on its third reading, would require the Department of Financial Protection and Innovation (DFPI) to develop rules permitting state fees and transactions under the Digital Financial Assets Law (DFAL) to be payable in crypto.

The DFPI is California’s regulatory agency tasked with overseeing financial services and protecting consumers while promoting responsible innovation. Individuals and entities conducting crypto business activities in the state must obtain a license from the DFPI.

If AB 1180 clears the Senate and is signed into law by Governor Gavin Newsom, the bill would become effective on July 1, 2026.

According to the bill’s sponsor, Democratic Assemblymember Avelino Valencia, a pilot program would run until Jan. 1, 2031, when it would become fully operational.

If AB 1180 is passed, California could join the likes of Florida, Colorado and Louisiana that have accepted crypto payments for certain obligations in recent years.

California’s bill would require the DFPI to submit a report by Jan. 1, 2028, detailing all crypto transactions processed, in addition to any technical and regulatory challenges encountered.

Crypto transactions under DFAL are defined as any digital representation of value that is used as a medium of exchange, but is not legal tender.

AB 1180 saw four amendments before being passed by the California Assembly on June 2.

The most notable exclusion concerned a section that sought to define terms related to ride-sharing companies and personal vehicles used for transportation services.

“Bitcoin rights” bill also in the works 

AB 1180 seeks to complement AB 1052, known as the state’s “Bitcoin rights” bill, which is focused on laying out crypto self-custody rights for the state’s nearly 40 million residents.

AB 1052 was passed in the first assembly committee in a unanimous 11-0 vote on May 23 and has been ordered to a third reading.

Related: California financial regulator warns of 7 new types of crypto, AI scams

The bill would also deem the use of a digital financial asset as a valid and legal form of payment in private transactions and would prohibit public entities from restricting or taxing digital assets solely based on their use as payment.

A total of 117 merchants currently accept Bitcoin payments in California, BTC Maps data shows.

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