KEY FACTS: California Assemblyman Avelino Valencia introduced amendments to Assembly Bill 1052 (AB 1052), originally the “Money Transmission Act,” rebranding it as the “Digital Assets” bill to secure Bitcoin and cryptocurrency rights for the state’s 39.4 million residents. The revised legislation guarantees the right to self-custody of digital assets, protecting individuals’ ability to store Bitcoin in private wallets without interference, and recognizes cryptocurrencies as a legal payment method, barring public entities from imposing discriminatory restrictions or taxes. Currently in the legislative “desk process”.

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Source: The Seal of California

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California Pioneers Bitcoin Rights with Amended Digital Assets Bill

California has taken a significant step toward securing Bitcoin and digital asset rights for its nearly 40 million residents. On March 28, 2025, California Democrat Avelino Valencia, a member of the state’s Assembly and chair of the Banking and Finance Committee, introduced amendments to an existing money transmission bill, transforming it into a robust framework for protecting cryptocurrency users. Originally introduced as Assembly Bill 1052 (AB 1052) on February 20, 2025, under the title “Money Transmission Act,” the legislation has now been rebranded as the “Digital Assets” bill, shifting focus toward embracing the growing influence of Bitcoin and other cryptocurrencies.

An act to amend Section 2000 of the Financial Code, relating to financial institutions. Sections 1501 and 1520 of, and to add Sections 1516.5 and 1516.6 to, the Code of Civil Procedure, to add Section 3802 to the Financial Code, and to amend Section 87102 of, and to add Section 87100.5 to, the Government Code, relating to digital assets.
Source

The amendments, which were formally submitted just days ago, indicate California’s approach to digital currencies. Where the original bill aimed to regulate money transmission in a traditional sense, the revised version explicitly prioritizes Bitcoin and cryptocurrency self-custody protections, ensuring that residents can hold and manage their digital assets without interference or discrimination. This legislative effort adds to the trend across the U.S., where states increasingly recognize the importance of safeguarding cryptocurrency rights.

At the heart of AB 1052 is a provision guaranteeing the right to self-custody, a cornerstone of cryptocurrency philosophy. Self-custody allows individuals to maintain full control over their digital assets—such as Bitcoin (BTC)—using private wallets rather than relying on third-party custodians like exchanges or banks. This right has been a point of contention in regulatory debates, with some authorities advocating for stricter oversight to combat illicit activities while crypto advocates argue it is essential for financial sovereignty.

Under the amended bill, California residents would be legally protected in their ability to store Bitcoin and other digital assets in self-hosted wallets without fear of punitive measures from state or local governments. This move is seen as a direct response to growing concerns over the centralized control of digital currencies and the potential for overreach by public institutions.

Dennis Porter, CEO of the Satoshi Action Fund, a prominent cryptocurrency advocacy group, hailed the amendments as a potential game-changer.

“California often sets the national blueprint for policy, and if Bitcoin Rights passes here, it can pass anywhere,”...“Once passed, this legislation will guarantee nearly 40 million Californians the right to self-custody their digital assets without fear of discrimination.”

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Source: Satoshi Action Fund

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Beyond self-custody, AB 1052 recognizes digital financial assets as a valid and legal form of payment in private transactions. The bill explicitly prohibits public entities, such as state agencies or local municipalities, from imposing restrictions or additional taxes on the use of cryptocurrencies solely because they are digital. This provision aims to level the playing field between traditional fiat currencies and digital alternatives, fostering an environment where Bitcoin can thrive as a medium of exchange.

Currently, only 99 merchants in California accept Bitcoin payments, according to data from BTC Maps. However, proponents of the bill argue that formal legal protections could encourage wider adoption among businesses, particularly as consumer interest in cryptocurrency continues to grow. Removing barriers to using Bitcoin in everyday transactions could position California as a leader in the digital economy, as well as attract blockchain-based businesses and innovation to the state.

AB 1052 is now in the “desk process,” a preliminary stage in California’s legislative workflow where the bill has been formally introduced and awaits its first reading in the Assembly. If it passes through the Assembly and Senate, it will head to Governor Gavin Newsom’s desk for approval. Given California’s history of progressive policymaking and its status as a tech hub—home to Silicon Valley—the bill has a strong chance of gaining traction, though it will likely face scrutiny from lawmakers wary of cryptocurrency’s volatility and regulatory challenges.

The introduction of Bitcoin rights in California adds to the trend similar legislative efforts across the United States. Just last week, on March 25, Kentucky Governor Andy Beshear signed a “Bitcoin Rights” bill into law, that offers protections for cryptocurrency users in that state, including the right to self-custody and mine digital assets. Meanwhile, states like Oklahoma and Texas are advancing their legislation to establish strategic Bitcoin reserves, showing a growing acceptance of cryptocurrency at the state level. Federally, President Donald Trump’s March 7 executive order to create a national Bitcoin reserve using seized assets has further fueled the momentum, though progress at the national level remains slower due to bureaucratic hurdles.

If AB 1052 becomes law, its impact could extend far beyond California’s borders. As the most populous state in the U.S. and a global economic powerhouse, California’s policies often serve as a model for other jurisdictions. Legal protections for Bitcoin self-custody and usage could inspire similar measures in states still grappling with how to regulate or embrace digital currencies. For California’s 39.4 million residents, the outcome of this legislation could mark a turning point in the journey toward a decentralized financial future.

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Information Sources:

• Legislative Info
• Satoshi Action Fund/ X
• Cointelegraph

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