California Gov. Gavin Newsom on Wednesday signed an executive order laying the foundations for strengthening and regulating the state’s cryptocurrency industry (via CNBC). As outlined in the executive order, Newsom’s goal is “to create a transparent and consistent business environment for companies operating in the blockchain,” balancing “the benefits and risks for consumers.”
The executive order encourages the California Governor’s Office of Business and Economic Development (GO-Biz) to work with the State Department of Financial Protection and Innovation (DFPI) and the Business, Consumer Services and Housing Agency (BCSH). Together, government agencies are tasked with developing “potential blockchain applications and initiatives”[ads1]; that can include applications in the “private sector, academia and society.”
It also orders the DFPI to shape a regulatory approach to cryptocurrency, create consumer protection, and produce educational material that informs California residents about both the risks and benefits of cryptocurrency. The order specifically states that the material will “include information on how to avoid fraud and deception,” one of the biggest concerns around crypto.
“All too often, the government is lagging behind in technological progress, so we are at the forefront of this, laying the groundwork for consumers and businesses to thrive,” Newsom said in a statement.
Newsom’s plan is in line with the executive order signed by President Joe Biden in March, and serves as the White House framework for future cryptocurrency regulation. Right now, it’s too early to say how Newsom’s order will affect California’s cryptocurrency industry – no regulatory measures have been implemented yet, but plans are in place to do so.
Kristin Smith, CEO of the Blockchain Association, a trading group representing companies in the cryptocurrency industry, welcomed Newsom’s order. “The Blockchain Association applauds California for issuing an order to study crypto and digital assets,” Smith said in a statement. The Verge. She also added that the crypto industry is looking forward to working with the government “on sound rules for the industry to allow California – and the United States – to lead in crypto innovation.”
The Chamber of Digital Commerce, an advocacy group for blockchain technologies, had a similar response, remarks The order “rightly recognizes the role that blockchain technologies play in stimulating job growth and economic competitiveness for the state, but also the national economy.”