Governor Gavin Newsom this week touted California as being the first U.S. state to create a comprehensive regulatory framework for blockchain technologies and crypto digital assets, according to a press release.
Newsom signed an executive order on May 4 on cryptocurrencies which he said will “create a transparent regulatory and business environment for Web 3 companies” in the golden state.
The order is designed to “create a transparent and consistent business environment for companies operating in blockchain, including crypto assets and related financial technologies, that harmonizes federal and California laws, balances the benefits and risks to consumers, and incorporates California values, such as equity, inclusivity, and environmental protection.”
“California is a global hub of innovation, and we’re setting up the state for success with this emerging technology—spurring responsible innovation, protecting consumers, and leveraging this technology for the public good,” said Newsom.
Crypto assets and blockchain technology have increasingly become more popular in recent years with countries such as El Salvador, Venezuela, and the most recently the Central African Republic embracing digital currencies as legal tender.
It surpassed a $3 trillion market cap last November, up from $14 billion just five years prior, while roughly 16 percent of adults have invested in, traded, or used cryptocurrencies, according to a November Pew Research Center survey.
Newsom praised the order as a step forward for California, home to Silicon Valley, placing it at the fore of technological advancements.
“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.”
Specifically under the order, and pursuant to the California Consumer Financial Protection Law passed by the Legislature in 2020, the state will create a “transparent and consistent business environment” for companies operating in blockchain, including crypto-assets and related financial technologies.
This environment will “harmonize federal and California laws,” and balance the benefits and risks to consumers, among others things, Newsom said.
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