"Let blockchain bloom in California" - California Governor signs blockchain executive order today

On Wednesday, California Governor Gavin Newsom signed a blockchain executive order to begin implementing a crypto framework in California to promote responsible innovation, support California's innovation economy and protect consumers.

The executive order aims to create a transparent regulatory and business environment for Web3 companies, coordinate federal and California approaches, balance consumer interests and risks, and incorporate California values ​​such as fairness, inclusiveness, and environmental protection. According to the order and the California Consumer Financial Protection Act passed in 2020, the state will create a "transparent and consistent business environment" for blockchain-related companies, including crypto asset projects and related financial technology projects.

The new directive builds on the Biden administration’s executive order on cryptocurrencies issued in March, calling on regulators to work together to reduce risks and promote innovation.

“California will begin developing a regulatory approach to spur responsible innovation while protecting California consumers, assess how blockchain technology can be deployed for state and public agencies, and establish research and workforce development pathways to prepare Californians for success in this industry,” a statement from the governor’s office said.

The state plans to create a "transparent and consistent business environment" for crypto companies by harmonizing federal and California laws. It will also collect feedback from stakeholders to build the framework and look for potential opportunities to incorporate blockchain technology into state operations and public needs.

In February, California became the latest state to consider authorizing state agencies to accept cryptocurrencies as payment for government services. The bill, sponsored by California Democratic Senator Sydney Kamlager-Dove, is currently being considered in the California Senate.

Newsom was a politician who was known to be in favor of cryptocurrency before he was elected governor of California in January 2019. In 2014, Newsom became one of several American politicians to accept Bitcoin donations for his campaign.

In 2020, Newsom signed a law similar to today’s executive order. The law renamed a California department and gave it the power to regulate virtual currencies while promoting consumer-friendly innovation.

“California is a global innovation hub, and we are setting the state up for success with this emerging technology — spurring responsible innovation, protecting consumers, and leveraging this technology for the public good,” Newsom said. “Governments often lag behind technological advances, so we are getting ahead of the curve here and laying the foundation for consumers and businesses to thrive.”

Newsom said the executive order builds on President Biden’s recent moves to bring regulatory clarity to the emerging asset class, hoping to put California at the forefront of upcoming federal policy.

Denelle Dixon, CEO of the Stellar Development Foundation, said it was a “huge win” to see California take blockchain rulemaking seriously, especially in terms of job creation. “As the birthplace of Web2, today California takes a step forward towards a Web3 future,” he said.

Under the executive order, California officials are tasked with soliciting feedback from industry participants and the public. Lawmakers will also consider how blockchain technology can be used to address public and policy needs.

Meanwhile, New York is considering a bill that could restrict proof-of-work mining, Illinois lawmakers have proposed a measure to allow the tax department to accept crypto payments, and Colorado’s governor is pushing for cryptocurrency tax payments.

“Like many things in American politics, crypto regulation trickles down from the states,” said Ron Hammond, director of government affairs at the Blockchain Association. “A lot of the fights we see at the state level do trickle down to the (federal level).”

Dee Dee Myers, senior advisor to the California governor, noted that a quarter of U.S. blockchain businesses are based in California. She added that the order is intended to help them stay in the state through responsible regulations.