The California State Assembly has approved a bill seeking to allow state agencies to accept cryptocurrency as a form of payment for state-mandated fees and transactions under the provisions of the Digital Financial Assets Law (DFAL).

Assembly Bill 1180 (AB 1180) was passed in a unanimous 68-0 vote and will now move to the Senate for further consideration. Should it be enacted, the Department of Financial Protection and Innovation (DFPI) will be tasked with establishing the regulatory framework and specific rules governing these cryptocurrency payment processes.

Democratic Assemblymember Avelino Valencia, the bill's sponsor, indicated that a pilot program will run until January 1, 2031, when it is set to achieve full operational status.

The extended period is designed to allow for a comprehensive evaluation of the practicalities, security implications, and overall efficacy of accepting cryptocurrency for state transactions. By January 1, 2028, the DFPI will also be required to submit a detailed report outlining all cryptocurrency transactions processed during the pilot phase and any challenges or successes encountered.

California's initiative reflects a broader trend among governmental bodies to assess the potential utility of digital currencies in public services. The adoption of such a system could offer increased payment flexibility and potentially streamline certain administrative processes.