Federal law definitely would preempt state regulation. Here, FinCEN has issued a guidance with what I believe is the weight of federal regulation however. California typically ignores FinCEN rulings (except this one), but generally shouldn't.

Preemption is a complex business. Also, I'm not a lawyer, but this is one of the reasons why the issue is in federal court. The rules are so complex and contradictory as to be more of a burden on society than a help.