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California governor points govt order on crypto as state embraces blockchain expertise

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California Governor Gavin Newsom speaks at a press convention in Oakland, California, on Wednesday, on Feb. 9, 2022.

Medianews Group/east Bay Times Via Getty Images | Medianews Group | Getty Images

Tech buyers and companies in California have been betting on crypto for effectively over a decade. Now, the governor of the U.S. state with the most important economic system is becoming a member of the get together.

California Gov. Gavin Newsom issued an govt order Wednesday on cryptocurrencies, laying out a street map for regulatory and shopper protections and inspecting methods the state can make the most of blockchain applied sciences and digital belongings.

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

Newsom is directing the state’s enterprise and financial growth workplace to work in collaboration with California’s 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 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.”

Bitcoin over the previous yr

CNBC

The businesses will submit its findings and suggest subsequent steps. According to the order, it’s going to “reflect consultation with relevant state agencies regarding the forthcoming federal reports on the relationship of crypto assets to priorities in energy, climate, and preventing criminal activity.”

Myers stated the businesses plan to carry roundtables and listening classes with business leaders, shopper advocates and even critics.

“The opportunities are almost endless,” Myers stated. “We can do things like remove middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identity and provide benefits to people through government services. If we’re selling carbon offsets, we can make sure the same forest isn’t being sold twice and that there’s some record that’s transparent.”

Under California’s plan, the order would align with the Biden administration’s proposal in March to look at the dangers and advantages of cryptocurrencies.

Some 37 states have pending laws on cryptocurrencies and different digital belongings, based on the National Conference of State Legislatures. In February, New Hampshire issued an govt order to suggest new bitcoin legal guidelines.

Aaron Klein, senior fellow in financial research on the Brookings Institution, stated probably the most compelling a part of Newsom’s plan is the exploration of the way to seek out “crypto solutions to existing problems.”

“California seems to be trying to walk a tightrope between moving the state forward to embrace new technology while making sure that consumers and investors are properly protected,” Klein stated.

Newsom is certain to come across skeptics, given considerations in regards to the safety of crypto and the speculative cash that is poured into digital belongings. Criminals stole a file $14 billion value of cryptocurrency final yr, based on a report by information agency Chainalysis, and the SEC introduced Tuesday that it’s going to nearly double its workers chargeable for defending buyers in crypto markets.

“Blockchain has been around for decades, it has never found a widespread adoption use case,” stated Stephen Diamond, a legislation professor at Santa Clara University. “There’s a mania underway and for the state of California to come in and essentially say this has huge potential, to me, they’re feeding the mania.”

Myers stated it is vital to place in place “guardrails” to eradicate the power for dangerous actors to maneuver and to “make sure there are enforceable and clear guidelines to protect everybody.”

Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission, stated it is necessary to get states and authorities businesses on the identical web page.

“What we would not want to see is a situation where states are competing with one another to attract businesses by either lowering standards or providing incentives,” Massad stated.

WATCH: SEC boosts crypto unit

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