California Governor Gavin Newsom spoke at a press conference in Oakland, California, Wednesday, February 9, 2022.
Medianews / East Bay Times Group Via Getty Images | Medianews Group | Getty Images
Technology and business investors in California have been betting crypto for well over a decade. Now, the governor of the U.S. state with the largest economy is joining the party.
California Gov. Gavin Newsom issued an executive order Wednesday on cryptocurrencies, creating a roadmap for regulatory and consumer protection and examining how the state can take advantage of blockchain technology and digital assets.
“Of the 800 blockchain businesses in North America, about a quarter of them are in California, more than any other state,” he said. Dee Dee Myers, Newsom’s senior adviser and director of the Governor’s Office for Business and Economic Development, told CNBC. “We’ve heard from a lot of people who want to be here, and we want to help them responsibly.”
Newsom directed the state’s business and economic development office to work 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 companies operating on the blockchain, including crypto assets and related financial technologies, that align federal and California laws, balance benefits and risks for consumers, and incorporate California values, such as equity., inclusiveness, and environmental protection. “
Bitcoin over the past year
The agency will submit its findings and recommend next steps. Under the order, it will “reflect consultations with relevant state agencies on upcoming federal reports on the relationship of crypto assets to energy, climate, and criminal activity prevention priorities.”
Myers said the agency is planning roundtable meetings and listening sessions with industry leaders, consumer advocates as well as critics.
“The opportunities are almost endless,” Myers said. “We can do things like remove middlemen from transactions involving real estate or even cars. We can work to protect people’s identities and provide benefits to people through government services. If we’re selling carbon offsets, we can make sure the same forest isn’t sold multiple times. twice and there are some transparent records. “
Under the California plan, the order would be in line with the Biden administration proposal in March to examine the risks and benefits of cryptocurrencies.
Some 37 states have pending legislation on cryptocurrencies and other digital assets, according to the State Legislative National Conference. In February, New Hampshire issued an executive order to propose a new bitcoin law.
Aaron Kleina senior fellow in economic studies at the Brookings Institution, said the most compelling part of Newsom’s plan is to explore ways to find “crypto solutions to existing problems.”
“California seems to be trying to walk the tightrope between moving forward states to embrace new technologies while making sure consumers and investors are actually protected,” Klein said.
Newsom will certainly encounter skepticism, as it worries about crypto security and speculative money being poured into digital assets. criminals stealing a record $ 14 billion worth of cryptocurrency last year, according to a report by data firm Chainalysis, and so on The SEC announced Tuesday that would almost double the number of staff responsible for protecting investors in the crypto market.
“Blockchain has been around for decades, yet we have yet to find a widespread adoption use case,” he said Stephen Diamond, professor of law at the University of Santa Clara. “There’s a mania going on and the state of California comes in and says that this has great potential, for me, they’re eating mania.”
Myers said it’s critical to put in place “guardrails” to eliminate the ability for bad actors to maneuver and to “make sure there are enforceable and clear guidelines to protect everybody.”
Timothy Massadthe former chairman of the U.S. Commodity Futures Trading Commission, said it was important to get states and government agencies on the same page.
“What we don’t want to see is the situation of countries competing with each other to attract business by lowering standards or offering incentives,” Massad said.
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