Published in cooperation between Cardstudios and the Morgan Hill Times
California could soon let people pay state fees with cryptocurrency as a bill called AB 1180 just passed the State Assembly with full support, 78 to 0. It now heads to the Senate, and if signed into law by Governor Gavin Newsom, the program would kick off in July 2026 and run for five years.
Under this pilot program, the state’s Department of Financial Protection and Innovation (DFPI) will oversee everything from building the payment system to making sure it follows existing rules. An early report due in 2028 will look at how well the system is working, how many people use it, and what could be improved. The program alone could cost the state at least $150,000 just to get started.
The lawmaker behind the bill, Avelino Valencia, sees the proposal as a way to help the state stay current with how people prefer to handle payments. Rather than making bold moves all at once, the state wants to test how crypto payments work in a controlled setting before considering a broader rollout.
Other states like Colorado, Utah, and Florida already accept cryptocurrency for certain payments, usually by working with third-party services like PayPal to convert digital assets into U.S. dollars. In California’s case, lawmakers are aiming to avoid passing those extra service charges on to residents, keeping the option accessible to more people.
This proposal also comes as more investors explore high-risk, high-reward crypto projects. These types of ventures, while often volatile, have encouraged broader interest in how digital currencies can be used beyond just trading. California’s bill is focused more on utility than speculation, using existing crypto balances for real-world payments like license renewals or tax bills.
AB 1180 is part of a larger effort to give digital assets a clearer role in daily life. Another bill from the same legislator, AB 1052, focuses on protecting the right to use cryptocurrency in private deals and retail settings. That bill also includes a rule change: if a person leaves their crypto untouched on an exchange for more than three years, the state could claim it as unclaimed property. However, users would be notified well in advance, six months to a year, giving them a chance to log in and show they still want to keep the asset.
The goal behind both bills is to bring more structure to how crypto is used in the state. Lawmakers want to give people more flexibility without opening the door to chaos. And with rules being created by the DFPI, crypto-related companies would need to meet the same licensing and compliance standards as other financial service providers in California.
Groups supporting the bill say collecting data on crypto payments is a smart way for the state to learn what works and what doesn’t. It’s a cautious but forward-looking approach that could shape how other departments handle digital payments in the future.
And this isn’t just for big cities. Many local communities, like Morgan Hill, could see improvement from opportunities that decentralized finance could bring, such as faster processing of payments, better access to online services and fewer barriers for residents who rely on digital wallets instead of traditional banks.
For smaller cities, the ability to pay fees using cryptocurrency could mean less time spent dealing with paperwork and more flexibility for people who work non-traditional hours or live farther from government offices. If California manages to roll out this program without major issues, it could help set a standard other states look to follow.
There hasn’t been much public criticism yet, but that could shift once the bill reaches the Senate or if technical or legal challenges arise during the rollout. For now, the program has strong momentum, especially with its focus on limited risk and long-term evaluation.
If the Senate approves and the Governor signs off, the pilot will begin in mid-2026 and run through mid-2031. That gives California five years to test how well crypto works for state-level transactions. With careful oversight and no extra fees for users, this could be a major step toward bringing digital payments into the mainstream, without rushing into it.
The crypto world still carries risk, but using it for basic state payments might soon be one of its more stable and useful roles.
