On Wednesday, May 4th, 2022, Governor Gavin Newsom signed an executive order laying down the basis for the state’s cryptocurrency economy to be bolstered and regulated. As stated in the executive order, Newsom’s goal is to create a clear and uniform business environment for blockchain enterprises that balances the rewards and dangers to consumers.
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What Does the Executive Order state?
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 to improve the state’s business climate (BCSH). The state agencies have been assigned to develop “possible blockchain applications and enterprises,” which might include applications in the “private sector, academia, and community.”
It also directs the DFPI to develop a regulatory approach for Bitcoin, provide consumer protections, and create educational materials that enlighten California consumers about the risks and benefits of cryptocurrencies.
“Too often government lags behind technological advancements, so we’re getting ahead of the curve on this, laying the foundation to allow for consumers and business to thrive,”Said Newsom
7 Core Goals of the Executive Order
The executive order specifies seven objectives:
- Harmonize federal and California regulations while incorporating California principles like equity, inclusion, and environmental protection to provide a transparent and consistent environment for blockchain technology enterprises.
- Collect feedback from stakeholders and develop a regulatory strategy by exploring and establishing public-serving use cases (such as implementing blockchain technologies into state operations) and developing research and workforce pipelines.
- Engage technical experts and other stakeholders interested in tackling injustices and the environmental impact of blockchain technology to gather feedback from stakeholders for future blockchain applications and initiatives.
- Create consumer protections and consolidate California’s place as the best worldwide destination for ethical crypto-asset enterprises to start and expand by engaging in a public process and developing a thorough regulatory strategy.
- Encourage regulatory clarity by working closely with the federal agencies required by Biden’s executive order to clarify their plans.
- Work with the commercial sector, academics, and community organizers and representatives to offer pilots for novel policies, initiatives, and solutions that illustrate and showcase the potential of using blockchain technologies to address specific concerns.
- Identify research prospects by introducing students to emerging opportunities in blockchain technology, such as crypto assets, to drive innovation and burgeoning fuel companies, and ensure that economic gains are distributed fairly.
Newsom’s Executive Order: The Rise of the Blockchain Technology
As the world’s fifth-largest economy, Newsom’s executive order is paving the way for California to become a global leader in blockchain technology innovation. California-based crypto businesses should be aware that the state is increasingly likely to implement a registration and licensing scheme akin to New York’s Bitlicense.