Largest US economy, California, moves to accept Bitcoin for state fees by passing new bill to Senate

The California State Assembly has unanimously passed AB 1180, a bill that allows state agencies to begin accepting Bitcoin and other digital assets as payment for certain regulatory fees.

Authored by Assemblymember Avelino Valencia (D-Anaheim), the legislation cleared the Assembly floor on June 3 with a decisive 78–0 vote (2 NV) and is now under review by the Senate Rules Committee.

If enacted, the bill would require California’s Department of Financial Protection and Innovation to develop rules allowing businesses regulated under the state’s Digital Financial Assets Law to pay licensing and examination fees using digital assets. The pilot program would launch on July 1, 2026, and run through January 1, 2031.

“AB 1180 puts California at the forefront of digital-asset innovation,” Valencia said in an earlier committee hearing. “It will serve as a blueprint for statewide integration.”

Keeping pace with the crypto-curious states

California’s push follows in the footsteps of Colorado, Utah, and Louisiana, which already accept crypto payments for certain government services.

Colorado, for example, enables crypto tax payments via PayPal’s service, charging users a flat $1 plus 1.83% per transaction.

Similar to that model, California’s system would convert digital payments into U.S. dollars upon receipt, avoiding the state’s direct exposure to crypto market volatility.

The program is designed as a five-year testbed. By January 2028, DFPI must submit an interim report evaluating the system’s effectiveness, operational costs, fraud or abuse risks, and public feedback.

If successful, the pilot could pave the way for broader crypto acceptance across other state agencies.

Strategic implications for California’s crypto ecosystem

The bill’s passage is particularly relevant to the state’s burgeoning crypto sector. California is home to major blockchain companies such as Ripple, Solana Labs, and Kraken, many of which must navigate complex and costly regulatory licensing processes.

By enabling crypto fee payments, the state may streamline compliance for these firms and signal its openness to technological innovation in financial services.

Crypto payment processors like BitPay, Coinbase Commerce, and PayPal are now potential contenders for a lucrative state contract. The exact provider will be determined through a procurement process led by DFPI.

However, not everyone is on board. Consumer advocacy groups and fiscal watchdogs have raised concerns about transaction fees, volatility, and the environmental footprint of crypto mining. Legislators have hinted that the Senate might introduce consumer-protection amendments, such as fee caps or refund mechanisms, to address these risks.

Political momentum for crypto rights

The bill is part of a broader legislative push by Valencia, who is also advancing AB 1052, a so-called “Bitcoin Rights” bill that aims to enshrine protections for self-custody, node operation, and peer-to-peer transactions in state law. Backed by national crypto advocacy group Satoshi Action Fund, the measure positions California as a counterweight to federal regulatory ambiguity.

“If Bitcoin rights pass here, they can pass anywhere,” said Dennis Porter, CEO of the Satoshi Action Fund, in an interview with Politico.

The Senate is expected to take up AB 1180 later this summer. If it passes and is signed by Governor Gavin Newsom, the DFPI will begin developing the crypto payment system in 2026, with an eye toward statewide deployment by the decade’s end.

The experiment may well shape the future of public finance, not only in California but nationwide. As Valencia put it, “California can’t afford to fall behind.”

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