California Governor Gavin Newsom issued an Executive Order this week claiming to be the first state in the nation to begin creating a comprehensive and harmonized framework for responsible Web3 technology.
According to a statement posted by the Governor’s office, the goal is to foster responsible innovation, bolster California’s innovation economy, and protect consumers. California also seeks to “create a transparent regulatory” environment while promoting equity, inclusivity and environmental protection.
California expects to begin the process of creating a regulatory approach, review how to deploy blockchain technology for state and public institutions, and build research and workforce development pathways for California.
Governor Newsom stated:
“California is a global hub of innovation, and we’re setting up the state for success with this emerging technology – spurring responsible innovation, protecting consumers, and leveraging this technology for the public good. Too often government lags behind technological advancements, so we’re getting ahead of the curve on this, laying the foundation to allow for consumers and business to thrive.”
California said their EO builds upon the EO issued by the Biden White House earlier this year.
Under the EO, California indicates that it has seven priorities:
- 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.
- Collect feedback from a broad range of stakeholders, create a regulatory approach to crypto assets harmonized between federal and state authorities, explore and establish public-serving use cases (such as incorporating blockchain technologies into state operations), and build research and workforce pipelines.
- Collect feedback from a broad range of stakeholders for potential blockchain applications and ventures, with particular attention to crypto assets and related financial technologies. Engagement should include technical experts, stakeholders interested in addressing inequities and environmental impact, companies both based in and outside California, and more.
- Engage in a public process and exercise statutory authority to develop a comprehensive regulatory approach to crypto assets harmonized with the direction of federal regulations and guidance, creating consumer protections and solidifying California’s status as the premiere global location for responsible crypto asset companies to start and grow.
- Engage in and encourage regulatory clarity via progress on the processes outlined in the federal executive order, with state agencies coordinating closely with the Washington, D.C. Office of the California Governor.
- Explore opportunities to deploy blockchain technologies to address public-serving and emerging needs, working with the private sector, academia, and community to present pilots for innovative policies, programs, and solutions that demonstrate and showcase the potential of adopting blockchain technologies to respond to specific challenges identified by state agencies.
- Identify opportunities to create a research and workforce environment to power innovation in blockchain technology, including crypto assets. The goals will be to expose students to emerging opportunities, power emerging industries, and help ensure economic benefits are experienced equitably.
Recently, California has experienced an exit of a number of tech firms, including Fintechs. Simultaneously, California has experienced a decline in population due to various reasons. Meanwhile, states like Florida and Texas have boomed. Florida has emerged as a Fintech hotbed with a growing number of blockchain firms locating operations in the Miami region, supported by state and local officials.
While California remains a hotbed of innovation and tech in general, it will be interesting to see if Governor Newsom executes on the stated goals of the EO, or if it becomes political window dressing.