On Wednesday, California Governor Gavin Newsom signed an Executive Order that sets the stage for regulation and support of the cryptocurrency industry in California (via CNBC). Newsom’s goal, as stated in the executive order is to create a transparent environment that allows companies to operate in blockchain. This will balance “the benefits and risk to consumers.” The executive order requires the California Governor’s Office of Business and Economic Development to work with the state’s Department of Financial Protection and Innovation, Business, Consumer Services and Housing Agency, and the Department of Financial Protection and Innovation. The state agencies are charged with developing “potential blockchain apps and ventures” together. This could include applications in the private sector, academia, and the community.
It also directs the DFPI’s creation of consumer protections and a regulatory approach to crypto. The order states that the materials will include information about how to avoid frauds and scams, which is one of the main concerns about crypto.
Newsom stated in a statement that “too often government lags behind technological advances, so we’re getting ahead on this, laying foundation for consumers and businesses to thrive.”
Newsom’s plan is in line with President Joe Biden’s March executive order, which serves as the White House’s framework to regulate cryptocurrency in the future. It’s too early to predict how Newsom’s order might impact California’s cryptocurrency sector. Although no regulatory measures have been implemented yet, the plans are in place.
. @DigitalChamber statement about California Executive Order N-9-22. “The #California executive orders rightly recognizes #blockchain technologies’ role in spurring job growth, economic competitiveness for both the state and the national economy.” pic.twitter.com/QtOz8WOadY– Chamber of Digital Commerce (@DigitalChamber) May 4, 2022
Kristin Smith, executive director of Blockchain Association, a trade association representing companies in cryptocurrency industry, welcomed Newsom’s executive order. Smith stated that the Blockchain Association applauds California’s executive order to study crypto- and digital assets. Smith also stated that the crypto industry is eager to work with the government on common-sense rules for the industry to allow California and the United States to lead in crypto innovation.
The Chamber of Digital Commerce, an advocacy organization for blockchain technologies, responded in a similar manner. It noted that the order “rightly acknowledges the role blockchain technology plays in spurring job growth, economic competitiveness for both the state and the national economy.”