Gov. Newsom Signs Executive Order on Cryptocurrency and Blockchain Technology

“If this makes your head spin, pretty much the state wants to have cryptocurrency and blockchain-related companies to set-up shop in California and retain them, but wants to find the right path to do it, wants to work with the federal government to keep it all on the level, and wants to make sure the technology, as well as cryptocurrency, can work for them,” explained William Kirilenko, an investment advisor in the Bay Area, to the Globe on Wednesday. “Blockchain technology has a lot of exciting applications, but it is also a major polluter due to all the computer usage it sees, so it could hurt there. Cryptocurrency itself also has a lot of problems, like volatility, with major financial players like Warren Buffett comparing it to famous bubble investments of the past like the tulip investment bubble of the 1630s or most of the faltering tech companies during the dotcom bust a few decades ago.”

“This is just the state saying ‘The technology looks pretty good, but we need to look into this more and put protections in place before jumping in.'”

State researching blockchain usage, regulations

Newsom noted on Wednesday that California needed to catch up on the technology now to better regulate it and to help consumers and businesses to grow in the state in the future.

“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,” the Governor said in a statement. “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.”

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

“The opportunities are almost endless. 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.”

While the Order has been praised by many on Wednesday, others remain skeptical of how far the Order can really go and if it will truly benefit the state.

“Blockchain technology is finally seeing applications, so that’s good,” added Kirilenko. “But it’s also tied heavily, again, to cryptocurrency, and that’s where a lot of people against this get antsy. Cryptocurrencies like Bitcoin are extremely volatile, so to many, they make the technology look weak as a result. Huge price changes, both up and down, scare them. And this is a big part of both the federal and now California plan. Looking into this more closely to see how viable it all is and  regulating it so it doesn’t jump the track. Can crypto and blockchain technology  be beneficial? And how safe is it, especially with the SEC now doubling the staff looking into the growing number of security issues and breaches in the technology. At the very least, California now has a way to move forward on this now.”

Newsom’s Executive Order will be seen to by multiple state agencies, including the California Business, Consumer Services and Housing Agency and the Department of Financial Protection and Innovation.