California advances digital assets bill with Bitcoin protections

California has amended Assembly Bill 1052 (AB 1052), now renamed "Digital Assets," to include significant protections for Bitcoin (CRYPTO:BTC) and cryptocurrency users.

Introduced by Avelino Valencia, chair of the Banking and Finance Committee, the bill aims to secure self-custody rights and recognise digital assets as valid payment methods in private transactions.

The revised bill explicitly affirms the legality of using digital assets for goods and services, prohibiting public entities from taxing or restricting their use solely based on their nature as cryptocurrencies.

However, it does not mandate state or local governments to accept digital assets as payment.

One of the most notable provisions protects self-custody rights, barring public agencies from imposing limits or requirements on individuals using hardware wallets or self-hosted wallets to manage their digital assets.

The Satoshi Action Fund praised this measure, stating it would guarantee nearly 40 million Californians the right to control their digital wealth without fear of discrimination.

AB 1052 also addresses unclaimed property laws.

If a digital asset account remains dormant for three years, it will escheat to the state, requiring holders to transfer the asset to a state-designated custodian.

The Controller must appoint a custodian by January 1, 2027, ensuring that unclaimed crypto funds are securely managed.

Additionally, the bill expands California's Political Reform Act of 1974 to prohibit public officials from issuing, promoting, or sponsoring digital assets, securities, or commodities.

This measure seeks to prevent conflicts of interest and maintain ethical standards in public office.

The amendments reflect California's broader efforts to establish a clear regulatory framework for cryptocurrencies.

Earlier initiatives include Senate Bill 97 (SB 97), introduced by Tim Grayson in February, which focuses on stablecoin approval guidelines.

Other states like Arizona and Texas have also advanced crypto-related legislation, signaling growing national interest in regulating digital assets.

At the time of reporting, the Bitcoin (BTC) price was $83,919.87.