A new legislative proposal in California aims to expand the acceptance and use of digital currencies like cryptocurrency across the state. The measure, Assembly Bill 1052, introduced by Assemblyman Avelino Valencia, would establish broad protections for businesses and individuals engaging in digital asset transactions.
The proposed legislation, currently under review by the Assembly Banking and Finance Committee following recent amendments, would guarantee the right of California residents and businesses to utilize digital financial assets as a legitimate form of payment. The bill explicitly recognizes cryptocurrencies like Bitcoin as valid tender for goods and services in private transactions.
This new measure stands in contrast to existing California law, which will require licensing through the Department of Financial Protection and Innovation for digital financial asset business activities starting July 1, 2026. The proposed bill would prevent government entities from implementing restrictions or special requirements on digital currency usage, though standard transaction taxes and fees would still apply as they do with traditional payment methods.
The legislation also addresses potential conflicts of interest by expanding the Political Reform Act of 1974. Under the new provisions, public officials would be barred from issuing, promoting, or sponsoring digital assets, securities, or commodities. The bill explicitly prohibits public officials from engaging in digital asset transactions that could conflict with their official duties.
This initiative is part of California’s broader effort to regulate digital assets, following the establishment of the Digital Financial Assets Law through two pieces of legislation signed by Governor Gavin Newsom in October 2023. While these laws were originally set to take effect on July 1, 2025, subsequent legislation delayed the
implementation until July 1, 2026.
In a related development, Assemblyman Phillip Chen has put forward Assembly Bill 236, which would cap licensing fees under the Digital Financial Assets Law at $5,000. This companion legislation aims to make compliance more manageable for businesses operating in the digital currency space.
The proposed changes would mark a significant shift in California’s approach to digital currency regulation. While maintaining oversight through existing licensing requirements, the bill would create a more permissive environment for digital asset transactions while
establishing clear boundaries for public officials’ involvement in the sector.
This legislative initiative reflects the growing mainstream acceptance of digital currencies and blockchain technology in financial transactions. By providing legal clarity and protection for digital currency users while maintaining appropriate regulatory oversight, the bill seeks to balance innovation with consumer protection.
If enacted, the legislation would position California as one of the more cryptocurrency-friendly states in the nation, potentially attracting more blockchain and digital asset businesses to the region. The measure’s provisions protecting private transactions while maintaining standard tax obligations demonstrate an attempt to integrate digital currencies into the existing financial framework without creating special advantages or disadvantages for their use.
As the bill continues through the legislative process, stakeholders from both the traditional financial sector and the digital asset industry are closely monitoring its progress. The outcome could set important precedents for how other states approach the regulation and integration of digital currencies into their financial systems.