California Governor Gavin Newsom Signs Executive Order Shaping Crypto Regulation in the State

California Governor Gavin Newsom Signs Executive Order Shaping Crypto Regulation in the State
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PEOPLE/Economy

California Governor Gavin Newsom signs executive order shaping crypto regulation in the state

California Governor Gavin Newsom signed an executive order on Wednesday that lays the basis for the state’s cryptocurrency business to be strengthened and regulated (via CNBC).

05/08/2022

Newsom’s goal, as stated in the executive order, is to “create a transparent and consistent business environment for companies operating in blockchain,” while balancing “the benefits and risks to consumers.”

California to Embrace Cryptocurrency

The executive order directs the California Governor’s Office of Business and Economic Development (GO-Biz) to work with the state’s Department of Financial Protection and Innovation (DFPI) and the Business, Consumer Services, and Housing Agency (BCSHA) (BCSH). The state departments will collaborate to develop “possible blockchain applications and enterprises,” which might include applications in the “commercial sector, academia, and community.”

It also directs the DFPI to develop a regulatory approach to bitcoin, implement consumer protections. Also, create educational materials informing California residents about the dangers and benefits of cryptocurrencies. According to the order, the materials will “include information about how to avoid scams and frauds,” which is one of the major concerns about cryptocurrency.

“Too often, government lags behind technology breakthroughs, so we’re getting ahead of the curve on this. Setting the groundwork for consumers and businesses to succeed,” Newsom said in a statement.

Newsom's proposal

Newsom’s proposal is consistent with the executive order signed by President Joe Biden in March. It serves as the White House’s framework for future cryptocurrency regulation. It’s too soon to tell how Newsom’s order will affect California’s cryptocurrency industry. No regulatory measures have yet been implemented, but plans are in the works.

Kristin Smith, executive director of the Blockchain Association, a trade group representing cryptocurrency startups, applauded Newsom’s executive order. Smith told The Verge, “The Blockchain Association applauds California for releasing an executive order to explore crypto and digital assets.” She also stated that the crypto industry is looking forward to working with the government “on logical industry norms that will allow California — and the United States — to lead in crypto innovation.”

The Chamber of Digital Commerce, an advocate group for blockchain technologies, had a similar reaction. Saying that the ruling “rightly recognizes the role blockchain technologies play in promoting employment creation and economic competitiveness for the state, but also the national economy.”

By Elah Mae Ariate Wozinga Staff

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