California's encryption licensing law faces a $193 million funding shortfall, which may affect the implementation plan for 2026.

The regulatory agency in California, responsible for overseeing the state’s cryptocurrency licensing law, will require additional funding to launch the project before the scheduled implementation date of July 1, 2026. The California Department of Financial Protection and Innovation is expected to face a funding shortfall of $193 million to establish multiple initiatives, including the Digital Financial Assets Act. This legislation is set to be introduced in 2023 and aims to create a licensing framework for digital asset companies operating in the state. California is one of at least three states establishing a licensing system for this trillion-dollar industry, aimed at enhancing oversight for consumers and investors and preventing fraud. Meanwhile, the U.S. Senate is attempting to pass legislation to provide a regulatory framework for the industry.