California Introduces Amendment to Regulate Cryptocurrency
California is taking steps to regulate cryptocurrency with the introduction of an amendment to Assembly Bill 1052 (AB-1052), also known as the “Bitcoin Rights” bill. Juan Carrillo Valencia, a lawmaker in California who chairs the Banking and Finance Committee, has introduced the money transmission bill with the aim of making Bitcoin and crypto rights a major focus, potentially benefiting the state’s residents. The move has been embraced by the Satoshi Action Fund, which sees it as a significant step toward economic freedom for the nearly 40 million Californians. If passed, the bill would secure the storage and unencumbered construction of cryptocurrencies like Bitcoin.
AB-1052 explicitly affirms the right to self-custody, allowing individuals to hold, secure, and control their cryptocurrency directly without the need for a third party, such as a bank or exchange. This would free public agencies from the responsibility of administering access to people’s digital property. The bill would also recognize digital financial assets as a legitimate and legal payment method in private transactions, and prohibit public entities from restricting or taxing digital assets solely based on their use as payment.
One of the key features of the bill is how it addresses unclaimed digital assets. It establishes a simple procedure for dealing with such assets, ensuring that the funds do not disappear into bureaucratic limbo. Licensed custodians would be responsible for protecting the funds if a person has not accessed their crypto wallet for an extended period of time. This official legal framework for establishing digital property and securing assets is an important step that is currently lacking under existing legal language.
AB-1052 aims to regulate the broader actions public officials might take regarding digital assets, securities, or commodities. It pairs amendments to the Political Reform Act 1974, which would help curtail political influence in the financial innovation landscape, prevent potential conflicts of interest, and ensure that public officials cannot misuse their positions against digital asset markets. If passed, AB-1052 would be a significant victory for blockchain supporters seeking to protect digital property rights, and could serve as a model for other states looking to implement similar consumer protections for cryptocurrency trading.
The United States as a whole is actively shaping digital asset policy. Both Republicans and Democrats agree that crypto legislative reform is necessary. However, regulatory decisions regarding crypto still rely on outdated precedents like the 1946 Howey case, which was based on California’s orange groves. In recent months, several states have introduced cryptocurrency legislation, ranging from Bitcoin reserves to task forces aimed at informing state policies on digital assets.
For example, North Carolina introduced a bill on February 10 that would allow the state treasurer to invest public funds in “qualified” digital assets. Representatives Bryan Posthumus and Ron Robinson in Michigan introduced a bill on February 13 to amend rules around the state budget, enabling the government to create a crypto reserve. Texas is also working on a ground-breaking Bitcoin reserve bill. Kentucky, Pennsylvania, and Ohio are interested in investing in Bitcoin as well. These developments indicate that more states are recognizing Bitcoin as a critical asset. In February alone, Florida, Utah, Ohio, Missouri, and Kentucky introduced legislation to either create Bitcoin reserves or allocate state funds to crypto-related investment vehicles.