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California Gov. Gavin Newsom earlier today signed an executive order directing multiple state agencies to examine cryptocurrencies and blockchain technologies, and recommend ways to incorporate those into the functioning of the nation’s most populous state.
The order aligns with a crypto-oriented executive order signed by President Joe Biden in early March. As with that presidential order, today’s California order doesn't introduce any new regulations, nor does it provide state agencies with any particular directives. Instead, it instructs the Governor’s Office of Business and Economic Development to coordinate with both the Business, Consumer Services, and Housing Agency and the Department of Financial Protection and Innovation, to create a “regulatory approach to crypto assets harmonized between state and federal authorities.”
Within 60 days of federal agencies providing recommendations to Biden on national crypto policy, these California agencies must provide recommendations to Newsom on how to regulate crypto in the state, while at the same time considering “priorities in energy, climate, and preventing criminal activity.”
Though the California order does hail the potential benefits of spurring Web3 innovation, and Newsom himself described the initiative this morning as “getting ahead of the curve,” it is also steeped, like the Biden order, with language emphasizing “risk to consumers,” potential “inequities and environmental impact,” and the importance of determining “responsible crypto assets.”
The order tasks state agencies not only with determining how best to regulate crypto, but also with exploring how blockchain technologies could be incorporated into state operations. The agencies are also to consult the private sector on how to best create “research and workforce pipelines” that would combine the forces of the public and private sectors with academia to create and support the next generation of Web3 technology leaders.
The news comes at a time when many other states are creating similar Web3-focused task forces, and the federal government is beefing up its crypto regulatory capacity. According to the National Conference of State Legislatures, at least 37 states are currently considering crypto-related bills.
California is a somewhat distinct case, though, both in that its economy is the fifth largest in the world, and in that it is home to Silicon Valley and San Francisco, epicenters of the crypto industry.