June 29, 2022

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California Governor announces executive order that will shape cryptocurrency regulations in the state

2 min read
California Governor

California Governor Gavin Newsom signed an executive order on Wednesday, which lays the foundations for strengthening and regulating the cryptocurrency market within California (via CNBC). In the executive order, Newsom’s mission is “to establish a transparent and uniform business environment for businesses who operate on blockchain,” that balances “the potential benefits and risks to consumers.”

The executive order asks the Governor’s office of California for business and economic development (GO-Biz) to work together with the State’s Department of Financial Protection and Innovation (DFPI) and Business, Consumer Services and Housing Agency (BCSH). Together these state agencies are charged with developing “potential blockchain-related ventures and applications,” which could include applications for sectors such as “private industry, academic, and the community.”

The order also requires the DFPI to develop the regulatory framework for cryptocurrency, develop consumer protections as well in prepare educational materials to inform Californians about the potential risks and advantages associated with cryptocurrency. The order specifies that the materials must “include details on ways to stay away from scams and frauds” being one of the biggest concerns with a cryptocurrency.

“Too often, the government is lagging in technological advances, and we’re ahead of the trend, and setting the groundwork for businesses and consumers to prosper,” Newsom said in an announcement.

The Newsom plan is in line in line with an executive order that President Joe Biden signed in March and serves as the White House’s foundation for the future regulation of cryptocurrency. At the moment, it’s for us to know how the order will affect California’s cryptocurrency industry. No regulation has been rolled out yet, however, it is in the works for doing that.

Kristin Smith, chief executive officer of the Blockchain Association, a trade association representing businesses that operate in the field of cryptocurrency and welcomed the executive order of Newsom. “The Blockchain Association applauds California for releasing an executive directive to research crypto and digital asset types,” Smith said in an announcement sent to The Verge. Smith added that the cryptocurrency industry is looking forward to working with the federal government “on the common-sense rules that industry must follow that will allow California -and also in the United States — to take the lead in cryptocurrency technology.”

The Chamber of Digital Commerce, an advocacy group that promotes blockchain technology has a similar reaction, noting the order “rightly acknowledges the significance blockchain technology can play in encouraging employment growth and boosting economic competitiveness for the state as well as the overall economy.”

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