California Governor Gavin Newsom signed an executive order Wednesday that lays the groundwork for reinforcing and regulating the cryptocurrency industry in the state (via CNBC). As described in the executive orderNewsom’s goal is to “create a transparent and consistent business environment for businesses operating on the blockchain,” balancing “benefits and risks to consumers.”
The executive order urges the California Governor’s Office of Business and Economic Development (GO-Biz) to collaborate with the Department of Financial Protection and Innovation (DFPI) and the state’s Agency for Housing, Consumer Services and Businesses (BCSH). . Together, the state agencies are tasked with designing “potential blockchain applications and businesses,” which could include applications in the “private sector, academia, and community.”
It also directs the DFPI to shape a regulatory approach to cryptocurrencies, create protections for consumers, and produce educational materials that inform California residents about the risks and benefits associated with cryptocurrencies. The order specifically says that the materials will “include information on how to avoid scams and fraud,” a major concern about cryptocurrencies.
“Too often, government lags behind technological advances, so we are getting ahead of this, laying the groundwork to enable consumers and businesses to thrive,” Newsom said in a statement.
Newsom’s plan aligns with the executive order that President Joe Biden signed in March, serving as the White House’s framework for future regulation of cryptocurrencies. At this point, it is too early to tell how Newsom’s order will affect California’s cryptocurrency industry: Regulatory measures have not yet been put in place, but there are plans to do so.
Kristin Smith, executive director of the Blockchain Association, a trade group representing companies in the cryptocurrency industry, welcomed Newsom’s executive order. “The Blockchain Association applauds California for issuing an executive order to study crypto and digital assets,” Smith said in a statement to the edge. He also added that the crypto industry hopes to collaborate 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, a blockchain technology advocacy group, had a similar response, taking note the order “correctly recognizes the role that blockchain technologies play in stimulating job growth and economic competitiveness of the state, but also of the national economy.”