issued an executive order on Wednesday aimed at fostering the development of the crypto industry within the state.
The order, the state said, makes California the first in the nation to begin creating a comprehensive framework for the high-profile, and sometimes controversial, industry. Other states, like New York and Wyoming notably, have crafted laws that address at least some aspects of the crypto markets.
Gov. Newsom’s order didn’t get into specifics, but said it would create a regulatory framework for the industry that would both foster innovation and protect consumers, look at ways to implement the technology within the state and public institutions, and build out research and workforce-development infrastructure.
“California is a global hub of innovation, and we’re setting up the state for success with this emerging technology,” Gov. Newsom said in a statement.
Industry groups lauded Gov. Newsom’s initiative. “The California executive order rightly recognizes the role blockchain technologies play in spurring job growth and economic competitiveness for the state,” said
founder and chief executive officer of the Chamber of Digital Commerce.
executive director of the Blockchain Association, said the business group welcomed common-sense rules and was eager to work with governments on crafting them.
The order also acknowledges the need to have California’s approach be consistent with the developing federal approach. In March, President Biden issued an executive order directing several federal agencies to conduct a broad review of cryptocurrencies.
The federal agencies were expected to have three-to-six months to prepare a public report with recommendations. Gov. Newsom’s order gives the state agencies 60 days after the publication of the federal report to prepare their own report.
While the crypto industry is global, Silicon Valley has been its main center since its early days. Many of the biggest companies in the space, including
, started in the area. The state formed a blockchain working group in 2018 to begin addressing issues around the industry.
Over the past year, other parts of the country, like Wyoming, have sought to attract crypto businesses to their jurisdictions. In particular, the cities and mayors of Miami and New York, have sought to attract industry players, mainly because the industry itself is attracting money and jobs.
The crypto industry remains a hot spot for venture capital, even with the capital markets under stress and cryptocurrency prices themselves down sharply. Startups in the industry raised $9.2 billion through 461 equity deals globally in the first quarter, according to CB Insights. At the same time, total venture funding fell 19% in the quarter.
The desire to keep as much of that activity as possible in California seems to be a focus of the executive order. It outlines several specific goals, the first of which is to create a “transparent and consistent” environment for crypto and blockchain companies.
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