California Bill AB1052 Proposed to Relax the Use of Digital Currency

A California bill is currently under consideration in the state legislature, which would allow all businesses and individuals in the state to accept digital assets such as cryptocurrency as payment and prohibit the government from restricting the use of digital currencies.

Assemblyman Avelino Valencia introduced the AB1052 bill earlier this year, which has entered the State Assembly’s Banking and Finance Committee for review. After being amended on April 1st, the bill has been resubmitted to the committee for further examination.

If the bill is passed, it would authorize individuals or businesses in California to accept digital financial assets like Bitcoin as a form of payment for goods and services. It would also validate the use of digital financial assets as a legitimate and legal means of payment in private transactions.

Currently, California law dictates that as of July 1, 2026, anyone engaging in business activities involving digital financial assets must obtain a license from the Department of Financial Protection and Innovation or be exempted from the licensing requirements.

In contrast, AB1052 specifies that public entities may not prohibit, restrict the use of digital currency, or impose any requirements. Furthermore, when digital financial assets are used as a form of payment, no taxes can be levied, no payments withheld, no evaluation of their value, or additional fees imposed.

AB1052 also expands the scope of the 1974 Political Reform Act, which prohibits public officials from using their positions to influence or participate in government decisions involving their financial interests. The new bill prohibits public officials from issuing, sponsoring, or promoting digital assets, securities, or commodities.

Under AB1052, public officials are prohibited from engaging in any transactions or dealings related to digital assets to avoid conflicts of interest with their public positions.

California’s digital assets are primarily regulated under the Digital Financial Assets Act, which consists of two bills establishing a licensing and regulatory framework for digital assets. Governor Newsom signed these two bills in October 2023, originally planned for implementation on July 1 of this year; however, another bill passed last year has pushed the effective date to July 1, 2026.

In January of this year, Assemblyman Phillip Chen introduced another bill, AB236, which proposes that under the Digital Financial Assets Act, the review fee for license applications should not exceed $5,000.