A revised bill in California aimed at safeguarding digital asset transactions and self-custody is set for its initial reading in the state legislature.
On March 28, the chair of California’s Banking and Finance Committee, Avelino Valencia, made amendments to Assembly Bill 1052, removing the initial title of “Money Transmission Act” and renaming it to “Digital Assets.”
The modifications introduce a comprehensive range of protections related to digital assets, effectively shifting the bill’s focus.
If approved, the legislation would permit individuals and businesses within the state to “accept payment in the form of a digital financial asset” for their products and services.
Additionally, it specifies that digital assets used in private transactions will be regarded as “valid and legal consideration.” Public entities would be prohibited from restricting or taxing the use of cryptocurrencies solely based on their classification as a payment method.
Nonetheless, the bill clarifies that it does not obligate state or local governments to accept digital assets as a form of payment.
A significant addition within the bill addresses crypto self-custody, preventing any public entity from imposing limitations or “requirements on the use of hardware or a self-hosted wallet” for managing digital assets.
AB 1052 also addresses unclaimed property laws. Should a digital asset account remain inactive for three years, it would “escheat to the state,” necessitating that the holder transfer the asset to a custodian designated by the state.
To avoid conflicts of interest, the bill enhances the state’s Political Reform Act. It would prohibit public officials from issuing, sponsoring, or “promoting a digital asset, security, or commodity,” as well as from engaging in any transactions that “create a conflict of interest with their public duties.”
Originally introduced in February, AB 1052 is now in the desk process and awaits its first reading in the California State Assembly.
This proposed legislation coincides with a growing political support for cryptocurrency in California. Recently, State Senator Ben Allen endorsed Dom Bei, a pro-Bitcoin candidate vying for a seat on CalPERS, the largest public pension fund in the nation.
A survey conducted by Toluna for a crypto exchange in February revealed that almost 80% of California cryptocurrency holders would back a political candidate who supports pro-crypto initiatives.