On March 31, 2025, a senator in #California proposed amendments to the Money Transmission Act, paving the way for the protection of the right to use cryptocurrencies as a means of payment and self-custody. With these new provisions, California – the fifth-largest economy in the world – could become a 'paradise' for crypto. Could this be a turning point for the digital asset sector in the U.S.?
From the Money Transmission Act to the Digital Assets Act
The Money Transmission Act was introduced by Democratic Senator Laura Richardson on February 20, 2025, initially focusing on requiring digital wallet providers in California to implement security measures, such as two-factor authentication. However, on Friday (March 28), Senator Avelino Valencia (also a Democrat) proposed amendments, renaming it the Digital Assets Act and adding many provisions to protect the use of cryptocurrencies.
A highlight of the amendment is allowing individuals and businesses in California to use cryptocurrencies like Bitcoin to pay for goods, services, and transactions between individuals. The law also prohibits public agencies from "banning, restricting, or imposing requirements" on the use of crypto, while exempting transactions paid with cryptocurrencies from taxes.
Self-Custody Rights Are Protected
Another important provision, according to Dennis Potter – CEO and co-founder #SatoshiActionFund – is "clearly affirming the right of individuals to self-custody Bitcoin and digital assets." This ensures that Californians can manage their cryptocurrencies independently, without being forced to deposit tokens into centralized wallets or custodial services. Potter emphasizes: "These provisions provide a new legal framework and protections, something California law previously did not stipulate."
Other Provisions in the Bill
The amendment also applies California's Abandoned Property Law to crypto: exchanges must transfer digital assets to the state if customers have not been active and do not respond for at least three years. Additionally, the 1974 Political Reform Act is expanded, prohibiting public officials from "issuing, funding, or promoting digital assets, securities, or commodities." Potter explains: "This aims to prevent conflicts of interest and protect the integrity of public office."
The provision banning the promotion of crypto could be California's response – a state controlled by the Democratic Party – to the memecoin Official Trump ($TRUMP ) on Solana, launched by President Donald Trump before taking office on January 20, 2025. While there are no records of any California officials promoting crypto, this provision could be a 'bait' to persuade Democratic lawmakers to support the bill.
The Importance of California
California, with a state GDP of nearly $3.9 trillion (2023), is the fifth-largest economy in the world and plays a leading role in setting regulatory trends. Potter remarks: "This bill reflects a major shift in the U.S., towards integrating cryptocurrencies like Bitcoin into the traditional financial and legal system." If passed, nearly 40 million Americans in California will be protected in their right to self-custody, according to the Satoshi Action Fund – a non-profit organization advocating for Bitcoin, which previously supported similar legislation in Kentucky and Oklahoma.
Impact on the Crypto Market
Bitcoin (~$88,000): New regulations could increase trust and drive adoption in California.
Crypto market: Altcoins like SOL (~$150) benefit from a friendly legal environment.
Globally: California could set a precedent for other states in the U.S., especially as Trump supports crypto (reserve $BTC , decree).
Conclusion: California – The New 'Paradise' for Crypto?
The amended Digital Assets Act in California is a significant step forward, protecting the rights to payment and self-custody of cryptocurrencies. With its leading economic position, the state could shape the future of crypto in the U.S. Will California become the new 'capital' of digital assets, or will political challenges stand in the way? As the wave of support for crypto rises in the U.S., the answer will soon be clear.
Risk warning: Investing in crypto carries high risks due to price volatility and regulatory changes. Please consider carefully before participating.