California lawmakers just sent a shockwave throughout the crypto space. It occurred in a string of unanimous votes this week when the State Assembly signed into law two bills that would revolutionize the way digital assets are handled and used in America's biggest state.
The first, AB 1052, allows California to take custody of abandoned crypto sitting on exchanges after three years.
The second, AB 1180, opens the door to state agencies accepting Bitcoin and other digital currencies for taxes and fees.
Both now head to the Senate, where the nation and a great deal of crypto hangs on each step.
Dormant Crypto: Seized, But Not Sold
Under AB 1052, if you simply leave your coins sitting on a centralized exchange for three years — no trades, no withdrawals, no logging in the state gets to step in and send those funds to a state wallet.
But unlike ordinary unclaimed property, California cannot sell your cryptocurrency. Instead, the coins remain there in their original form, waiting for you to return and claim them. Satoshi Action Fund policy director and bill co-author Eric Peterson explained it on X:
“Since @SimplyBitcoinTV and @TFTC21 have had some misunderstandings on AB 1052 which passed the California Assembly last night, I have put together an explainer thread about how this protects #bitcoin for the citizens of California. … The cryptocurrency remains in its native form, without conversions to dollars.”
Peterson stressed that the law applies only to exchange-listed assets, and not to self-custody wallets. "Crypto assets are returned to the owner once they reach out to them," echoed Hailey Lennon, a regulatory counsel at Coinbase, noting that similar legislation already operates for bank accounts and safe deposit boxes in most states.
Pay Your Taxes in Bitcoin? The State Pilot
The second bill, AB 1180, is just as groundbreaking. It allows the Department of Financial Protection and Innovation (DFPI) to implement a pilot program to accept payments in cryptocurrency as payment for state taxes and fees, starting July 2026. The pilot program will run until 2031, with the DFPI required to report on the transaction volume, technical issues, and consumer feedback by 2028. Assemblymember Avelino Valencia, who authored the bill, erupted into celebrations on X:
“Very excited about this. … I firmly believe this will be fully integrated into our society in the near future.”— Assemblymember Avelino Valencia
Crypto Twitter lit up as word went out.
“California Assembly passes bill to regulate Digital Assets under ‘Unclaimed Property’ law. Assets left on an exchange for 3 years will be transferred to the state, and can then be claimed by the owner.”
“California approved a bill to accept crypto for state payments”
What's Next? National Ripple Effects
Should these bills become law with the Senate and Governor Newsom's approval, California will join Colorado, Utah, and Louisiana in accepting cryptocurrencies for governmental payments, but set a new precedent for managing dormant digital assets.
Other states are watching closely, with industry lobbyists anticipating a wave of copycat laws if California's experiment succeeds.
Response has been tepid. Supporters label the bills a long-overdue update, protecting consumers and supporting innovation. Critics are worried about overreach by the government and privacy, some arguing that the state has no business with stuck crypto.
However, the promise that coins will be held back, not sold, until they are redeemed has gained provisional support from many in the community.
While California creeps closer to enacting such innovative crypto legislation, the rest of America holds its breath to understand whether digital assets will ever be included in day-to-day government and what occurs when the state gets stuck on misplaced coins.
