Gavin Newsom, the governor of California, has signed an executive order aimed at harmonizing a regulatory framework for blockchain between the federal government and the U.S. state as well as spurring innovation in the space.
In a Wednesday announcement, the California governor’s office said executive order N-9-22 and the California Consumer Financial Protection Law would allow the state to create “a transparent and consistent business environment for companies” in Web3 and the crypto space, including blockchain and financial technology firms. According to the order, the California state government will need to establish a regulatory approach to crypto assets concurrent with that laid out in U. S. President Joe Biden's executive order on digital assets signed in March.
Specifically, under the order the California Governor's Office of Business and Economic Development would coordinate with the Business, Consumer Services and Housing Agency and the Department of Financial Protection and Innovation, or DFPI, to get feedback from stakeholders. The DFPI will create a regulatory approach to crypto for the state as the Government Operations Agency explores use cases of blockchain technology for the public. In addition, the Governor's Council for Postsecondary Education will be responsible for identifying opportunities for research and workforce pipelines.
“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 the governor. “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.”
CA is the first state in the nation to begin creating a comprehensive & harmonized framework for responsible blockchain technology to thrive.⁰⁰We’re aiming to create a pipeline of talent for the emerging industry & utilize the technology for public good. https://t.co/6Um0lJ9p1y— Office of the Governor of California (@CAgovernor) May 4, 2022
Among the governor’s priorities for the order was addressing regulatory clarity in the digital asset space, including having state agencies coordinate with those on the federal level, and exploring “opportunities to deploy blockchain technologies to address public-serving and emerging needs.” The DFPI has 30 days to solicit public comment on crypto regulations, while the state government has 60 days from the publication of a federal report related to the order to report on progress to the governor's office.
The executive order was another example of the lack of a consistent regulatory framework for crypto and blockchain firms operating in the United States. While President Biden’s executive order attempts to address some of these issues, lawmakers at the state level have also acted, seemingly due to a lack of federal oversight. In February, New Hampshire Governor Chris Sununu issued an executive order establishing a commission to study crypto. Crypto firms operating in New York state have been required to obtain a BitLicense since 2015.