California Lawmaker Adds Bitcoin and Crypto Rights To Digital Assets Bill

A Californian lawmaker has added Bitcoin (BTC) and crypto rights to the amended Assembly Bill 1052 (AB1052) to recognize digital assets as a payment method, secure self-custody, and protect investors.

California Adds Bitcoin Rights To Digital Asset Bill

California’s Banking and Finance Committee chairman, Avelino Valencia, has added Bitcoin and crypto investors’ protections to his digital assets bill. Initially introduced in February, AB1052 aims to secure self-custody rights for the state’s residents.

On March 28, the Democrat lawmaker introduced the amended bill, changing its name from the “Money Transmission Act” to “Digital Assets” and shifting its focus to explicitly recognize digital assets as a “valid and legal” payment method in private transactions for goods and services.

Additionally, it prohibits public entities from restricting or taxing digital assets solely based on their use as a payment method. The Satoshi Action Fund backed the bill, stating, “Once passed, this legislation will guarantee nearly 40 million Californians the right to self-custody their digital assets without fear of discrimination.”

AB1052 also established a framework to handle unclaimed digital assets to prevent crypto funds from getting lost in “bureaucratic limbo,” as the Satoshi Action fund stated. The legislation notes that Unclaimed Property Law provides that all intangible personal property of an apparent owner “escheats to the state if, for more than 3 years after it becomes payable or distributable, the apparent owner has not taken specified actions showing an interest in or control of the property.”

Based on this, the bill would provide that “intangible property held in a digital asset account escheats to the state 3 years after either written or electronic communication to the owner is returned undelivered, or the date of the last exercise of ownership interest, as defined, by the owner.”

The legislation would also require the holder of a private key for a digital asset account escheated to the state “to transfer the digital asset to a custodian designated by the Controller. The bill would require the Controller to appoint a custodian no later than January 1, 2027, as specified.”

Lastly, It would “expand the scope of the Political Reform Act of 1974 to prohibit a public official from issuing, sponsoring, or promoting a digital asset, security, or commodity.”

US Lawmakers Advance Crypto Legislations

Amid the ongoing regulatory shift in the US, with the Securities and Exchange Commission (SEC) taking a less hostile approach toward the crypto industry, many states have introduced several crypto-related bills to develop the industry and protect investors.

Besides Assemblyman Valencia’s bill, California has also seen other efforts to create a clear regulatory framework for cryptocurrencies in the state.

In February, Californian lawmaker Tim Grayson introduced Senate Bill 97 (SB97) to amend the Digital Financial Assets Law to provide more comprehensive guidelines for Stablecoin approval by the Commissioner of Financial Protection and Innovation.

As Bitcoin Laws details, the bill “expands the existing evaluation criteria, which already include examining the issuer’s legally enforceable rights, redemption assets, potential risks, and representations about the stablecoin’s uses.”

Meanwhile, Arizona has advanced a bill aiming to expand the state’s definition of legal tender to include cryptocurrencies, including Bitcoin, alongside traditional currencies.

The state also leads the crypto legislation race with two Strategic Bitcoin Reserve (SBR) bills awaiting a final vote by the full House of Representatives.

At the time of writing, 27 state-level Strategic Bitcoin Reserve bills remain live in the US, with Oklahoma and Texas tied as the second most advanced states in the legislative process.