California governor signs cryptocurrency executive order

California Governor Gavin Newsom speaks at a press conference in Oakland, Calif., On Wednesday, February 9, 2022.

Medianews Group / East Bay Times via Getty Images | Media News Group | Getty Images

Tech investors and companies in California have taken a gamble crypto for over a decade. Now, the governor of the US state with the largest economy joins the party.

California Governor Gavin Newsom issued an executive order Wednesday on cryptocurrencies, setting a roadmap for regulatory and consumer protection and examining ways the state can benefit from blockchain technologies and digital assets.

“Of the 800 blockchain companies in North America, about a quarter of them are located in California, a dramatically higher figure than any other state,” Dee Dee Myers, Newsom’s senior adviser and director of the Governor’s Office of Business and Economic Development, told CNBC. “We have heard from so many that they want to be here and we want to help them do it responsibly.”

Newsom is directing the state’s business and economic development office working in conjunction with the California Business, Consumer Services and Housing Agency and the Department of Financial Protection and Innovation.

The order is designed to “create a transparent and consistent business environment for blockchain businesses, including cryptocurrencies and related financial technologies, harmonize federal and California laws, balance the benefits and risks for consumers, and incorporate California values ​​such as equity, inclusiveness and environmental protection. “

Bitcoin over the past year

CNBC

The commission will present its findings and recommend the next steps. According to the order, “it will reflect consultation with relevant state agencies on upcoming federal reports on the relationship between crypto assets and energy, climate and crime prevention priorities.”

Myers said the Commission plans to hold panel discussions and listening sessions with industry leaders, consumer advocates and even critics.

“The opportunities are nearly endless,” Myers said. “We can do things like remove middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identities and provide benefits to people through government services. If we sell carbon offsets, we can make sure the forest itself is.” it hasn’t been sold twice and that there are some discs that are transparent. “

Under the California plan, the order would align with that of the Biden administration March proposal to examine the risks and benefits of cryptocurrencies.

According to the National Conference of State Legislatures, some 37 states have pending legislation on cryptocurrencies and other digital assets. in February, New Hampshire has issued an executive order propose new laws on bitcoins.

Aaron Kleinresearcher in economic studies at the Brookings Institution, said the most compelling part of Newsom’s plan is exploring ways to find “cryptographic solutions to existing problems.”

“It appears California is trying to walk a tightrope state forward to embrace the new technology, making sure consumers and investors are adequately protected,” Klein said.

Newsom is sure to encounter skeptics given concerns about the security of cryptocurrencies and the speculative money being poured into digital assets. criminals stole a record $ 14 billion cryptocurrency value last year, according to a report by data company Chainalysis, and the SEC announced Tuesday which will nearly double its staff responsible for protecting investors in cryptocurrency markets.

“The blockchain has been around for decades, it has never found a widespread use case of adoption,” he said Stefano Diamante, professor of law at the University of Santa Clara. “There is a craze going on and for the state of California to come in and essentially say that this has huge potential, for me they are fueling the craze.”

Myers said it was essential to put in place “guardrails” to eliminate the ability to maneuver the bad guys and to “make sure there are clear and enforceable guidelines to protect everyone.”

Timothy Massadformer chairman of the US Commodity Futures Trading Commission, said it’s important to get states and government agencies together.

“What we don’t want to see is a situation where states compete with each other to attract businesses by lowering standards or providing incentives,” Massad said.

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