On Could 4, 2022, California Gov. Gavin Newsom signed Executive Order N-9-22 (EO) to create a regulatory strategy for cryptocurrency firms and to find out methods to use blockchain expertise for state and public establishments. By the EO, California is turning into a frontrunner in creating new guidelines of the street for rising digital currencies and associated crypto applied sciences.
The EO observes that “accountable innovation has been encumbered by regulatory uncertainty, particularly with regard to federal regulation,” and, as such, “state companies ought to work with, and concurrently to, the federal authorities to make California the primary state to ascertain a complete, considerate, and harmonized regulatory and enterprise surroundings for crypto property.”
Below the EO, the state has seven priorities:
Create a clear and constant enterprise surroundings for firms working in blockchain, together with crypto property and associated monetary applied sciences, that harmonizes federal and California legal guidelines, balances the advantages and dangers to shoppers, and incorporates California values resembling fairness, inclusivity, and environmental safety.
Accumulate suggestions from a broad vary of stakeholders, create a regulatory strategy to crypto property harmonized between federal and state authorities, discover and set up public-serving use instances (resembling incorporating blockchain applied sciences into state operations), and construct analysis and workforce pipelines.
Accumulate suggestions from a broad vary of stakeholders for potential blockchain purposes and ventures, with explicit consideration to crypto property and associated monetary applied sciences. Engagement ought to embrace technical consultants, stakeholders keen on addressing inequities and environmental influence, firms based mostly each in and outdoors California, and extra.
Interact in a public course of and train statutory authority to develop a complete regulatory strategy to crypto property harmonized with the path of federal laws and steerage, creating shopper protections and solidifying California’s standing because the premiere world location for accountable crypto asset firms to start out and develop.
Interact in and encourage regulatory readability through progress on the processes outlined within the federal executive order, with state companies coordinating intently with the Washington, D.C. workplace of the California governor.
Discover alternatives to deploy blockchain applied sciences to deal with public-serving and rising wants, working with the personal sector, academia, and group to current pilots for revolutionary insurance policies, packages, and options that show and showcase the potential of adopting blockchain applied sciences to reply to particular challenges recognized by state companies.
Establish alternatives to create a analysis and workforce surroundings to encourage innovation in blockchain expertise, together with crypto property. The targets will probably be to reveal college students to rising alternatives, energy rising industries, and assist guarantee financial advantages are skilled equitably.
California state companies, together with the Division of Monetary Innovation and Safety (DFPI) as specified within the EO, will seemingly be on the forefront of proposing and implementing new regulatory buildings for firms and shoppers, along with federal companies such because the CFPB, CFTC, and SEC. Pursuant to the phrases of the governor’s EO, California may additionally search to foster additional blockchain innovation for tasks like implementing good contracts and inspiring sustainability by means of its state Blockchain Working Group and Go-BIZ financial improvement initiatives. The state may additionally facilitate and encourage using numerous blockchain applied sciences by state companies through procurements with vendor firms.
Specifically, the EO requires DFPI and Go-BIZ to have interaction with and collect enter from stakeholders inside 30 days (within the case of DFPI) and instructs DFPI to ramp up its enforcement actions pursuant to the California Client Monetary Safety Legislation (CCFPL). The mandate for elevated enforcement signifies that regulation by enforcement of crypto-asset-related monetary services and products will stay a key technique because the EO’s mandate for cautious examine and considerate crypto-asset-related regulation develops.
As well as, a pair of payments within the California State Legislature would make cryptocurrency authorized tender for presidency companies. Each payments have been met with resistance and should not cross this session, however they do sign the altering views on integrating cryptocurrency and blockchain expertise into California society.
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