California legislators are raising the bar in the digital finance arena. On June 3, 2025, the State Assembly unanimously passed two monumental bills – AB 1052 and AB 1180 – that will fundamentally change the way cryptocurrencies are viewed under state law and incorporate into daily transactions. This communication includes a number of detailed and critical pieces of information about what is changing, why it matters, and what is next.
Digital Assets: New Approach to Unclaimed Property (AB 1052)
What does the bill do?
AB 1052 adds digital assets to California’s unclaimed property regime. Any cryptocurrency held in an exchange account that is deemed to be “dormant” for three years (no transactions, deposits, withdrawals, or log-in) is available for the state to claim. However, instead of liquefying those funds, California will hold the funds in their native form in a secure fashion that allows return of funds to rightful owner.
Why it’s Significant?
This will ensure cryptocurrencies are in their original form, rather than be converted to fiat and possibly diminished in value before being reclaimed. Eric Peterson of the Satoshi Action Fund emphasized this was a key update to prevent inadvertent “liquidation” of crypto assets.
How it Works?
- Assets are considered “unclaimed” after 3 years of inactivity or undeliverable communications.
- Holders must transfer private keys to a state-designated custodian, who safeguards the assets until owners reclaim them.
If the Senate and Governor Newsom approve it, AB 1052 takes effect on July 1, 2026.
Crypto as Currency: State Fee Payments Go Digital (AB 1180)
Overview of the Bill
AB 1180 authorizes California state agencies to accept cryptocurrencies—such as Bitcoin—as payment for fees and services. It creates a pilot scenario where transactions occur under the supervision of the Department of Financial Protection and Innovation (DFPI), guided by the emerging Digital Financial Assets Law.
Important Features Include
- A pilot program lasting from July 1, 2026, to January 1, 2031.
- A mandatory DFPI report by January 1, 2028, on volumes, challenges, and recommendations.
- Licensing requirements for crypto companies under the Digital Financial Assets Law (DFAL), effective July 1, 2025.
What this means
California will join other progressive states like Colorado and Utah that have already piloted crypto payments for public services. Supporters, including bill sponsor Assemblymember Avelino Valencia, hail this as a crucial modernization step.
Bigger Picture: Why These Bills Now?
For consumers and businesses:
- Asset integrity: Digital assets will not disappear or devalue because of idleness.
- Spending power: Small businesses and customers get the liberty to transact in crypto.
- Innovation boost: The state promotes itself as a crypto-centric hub for new digital finance services.
Potential Challenges
- Logistical load: Exchanges and custodians will need to adopt compliance with escheatment.
- Tech hurdles: Governments will need to develop a secure infrastructure to receive and hold digital payment.
- Industry worries: Some advocacy groups warn that without a conversion mechanism (e.g., immediate conversion to fiat) liabilities could occur.
Next Steps?
- SB 1052 and AB 1180 will both be in the California Senate.
- If approved, they go to Governor Newsom either for final signature or veto; and
- Upon being signed, that implementation time-frame starts; AB 1052, will be to complete the implementation by July 2026 and AB 1180 would begin at that date for the pilot programs.
Conclusion
California is moving aggressively to incorporate cryptocurrencies into both the legal and financial frameworks. From having unclaimed crypto that can be recovered to allowing digital payment methods for state fees and charges, these bills are setting the stage for a more crypto-centric future in the Golden State. While the Senate converses about these and many more laws, crypto users, crypto businesses, and California government officials should be on alert – this could be a landmark in how California recognizes and interacts with crypto overall. California is mixing legal reform with an emerging payment structure. California is not just catching up to the pace of reform, it is driving itself to the front in how perhaps a broader jurisdiction can responsibly integrate the use of crypto in our daily lives.
