California Governor Gavin Newsom on Wednesday signed an executive order that lays the groundwork for strengthening and regulating the cryptocurrency industry in the state (via CNBC). As stated in the executive order, Newsom’s goal is to “create a transparent and consistent business environment for companies operating on blockchain” that balances “consumer benefits and risks”.
The executive order calls on the Governor of California’s Office of Economic and Business Development (GO-Biz) to work with the Department of Financial Protection and Innovation (DFPI) and the Agency for Business, Consumer Services and State Housing (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 cryptocurrency, create consumer protections, and produce educational materials educating California residents about the risks and benefits associated with cryptocurrencies. The order specifically states that the material will “include information on how to avoid scams and fraud,” one of the top crypto concerns.
“Too often, government lags behind technological advancements, so we’re getting a head start on this, laying the foundation for consumers and businesses to thrive,” Newsom said in a statement.
Newsom’s plan aligns with Presidential Executive Order Joe Biden signed in March, serving as the White House’s framework for future cryptocurrency regulation. At this time, it is too early to tell what impact Newsom’s order will have on the California cryptocurrency industry – no regulatory measures have yet been rolled out, but plans are in place to do it.
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. She also added that the crypto industry looks forward to working with the government “on common sense rules for the industry to allow California – and the United States – to lead crypto innovation.” .
The Chamber of Digital Commerce, a blockchain technology advocacy group, had a similar response, noting the order “rightly recognizes the role that blockchain technologies play in driving job growth and economic competitiveness not only of the state, but also of the national economy.”