California bans officials from issuing meme coins under new law
Governor Gavin Newsom signed legislation barring state and local officials from issuing politician-linked meme coins, with civil enforcement rather than criminal penalties.
Key points
- Newsom signed the bill after it passed the California Senate 40-0 and the Assembly 78-0.
- The ban covers state and local elected and appointed officials, legislators and members of government boards, commissions and committees.
- Digital asset service providers cannot offer California residents meme coins issued on or after 1 January 2027.
- Tokens such as Dogecoin are not outlawed, so the law is not a statewide meme coin ban.
- Enforcement is civil: the attorney general can seek injunctions and disgorgement, and district attorneys, city attorneys and county counsel can also pursue violations.
California Governor Gavin Newsom has signed legislation that bars state and local public officials from issuing meme coins, according to U.Today. The bill, which targets politician-linked tokens, cleared the California Senate by 40-0 and the Assembly by 78-0 before reaching his desk.
Under the new rules, a California public officer cannot issue a meme coin. That category covers state and local elected and appointed officials, members of the Legislature, and members of government boards, commissions and committees, including bodies that hold only advisory powers.
Defining a meme coin is difficult, and the bill uses a broad definition. It covers digital assets tied to internet memes, public figures, celebrities, fictional characters, current events and online humour, among other things.
Newsom signs the bill
The law also reaches the market. Digital asset service providers will be barred from offering California residents meme coins issued on or after 1 January 2027. U.Today stresses that tokens such as Dogecoin are not outlawed, so this is not a statewide meme coin ban.
Lawmakers say financial instruments issued or promoted by government officials can create conflicts of interest, open the door to pay-to-play arrangements and raise risks of foreign influence. Blockchain wallets can be controlled pseudonymously, which the bill's supporters see as fertile ground for corruption.
Meme coins are now extremely easy to create, and pseudonymous crypto transactions could allow foreign actors and special interests to operate, according to the article. The measure is intended to close that gap for officials in the state.
Who is covered
Enforcement is civil rather than criminal. California's attorney general can seek an injunction to stop violations and ask a court to order the disgorgement of potentially ill-gotten money. District attorneys, city attorneys and county counsel can also pursue violations of the prohibition on California officials and public employees issuing meme coins.