California Governor Gavin Newsom signed an executive order on Wednesday laying the groundwork for strengthening and regulating the cryptocurrency industry in the state (via CNBC). As set out in the executive order, Newsom’s goal is “to create a transparent and consistent business environment for companies operating in blockchain” that “balances the benefits and risks to consumers.”
The executive order calls on 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 Business, Consumer Services and Housing Agency (BCSH). Together, the government agencies are tasked with envisioning “potential blockchain applications and enterprises,” including those in the “private sector, academia, and community.”
It also orders the DFPI to shape a regulatory approach to cryptocurrency, create consumer protections and produce educational materials that educate California residents about both the risks and benefits of cryptocurrencies. The order specifically says the material will contain “information on how to avoid scams and fraud,” one of the biggest concerns about crypto.
“Too often, government lags behind technological advances, so we are leading the way in this and laying the groundwork for consumers and businesses to thrive,” Newsom said in a statement.
Newsom’s plan aligns with the executive order signed by President Joe Biden in March and serves as the White House framework for future cryptocurrency regulation. At this point, it’s too early to say how Newsom’s order will affect the California cryptocurrency industry — no regulatory action has been taken yet, but plans are in place to do so.
Kristin Smith, the executive director of the Blockchain Association, a trading group that represents companies in the cryptocurrency industry, welcomed Newsom’s executive order. “The Blockchain Association applauds California for issuing executive order to study crypto and digital assets,” Smith said in a statement. The edge† She also added that the crypto industry looks forward to working with the government “on common sense industry rules to lead California – and the United States – in crypto innovation.”
The Chamber of Digital Commerce, an advocacy group for blockchain technologies, had a similar response, noticing the order “rightly recognizes the role blockchain technologies play in boosting job growth and economic competitiveness for the state, as well as the national economy.”