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June 27, 2022
Roughly twenty-five percent of the 800 blockchain businesses in North America are in California. In an effort to support responsible innovation of blockchain technology and digital assets, while addressing the risks that stem from their growth, California Governor Gavin Newsom issued Executive Order N-9-22 last month. The Executive Order seeks to create a regulatory framework – following the approach set forth in President Biden’s March 9, 2022 Executive Order – for the safe development and use of blockchain technology.
What Is Blockchain Technology?
At a basic level, blockchain is a distributed digital ledger that stores data. Functionally, blockchain is a decentralized database that facilitates the process of recording transactions and tracking assets in a network. Cryptocurrencies, such as Bitcoin, use blockchain technology to function. Blockchain acts as the ledger that records all of the transaction records and shares them across a large network of computers. For a transaction to be uploaded, it must be verified by multiple computers in the networks, which creates security within the blockchain.
California’s Priorities for Blockchain Technology
California’s Executive Order outlines seven priorities:
The federal and now California’s Executive Order emphasizes the trend toward widespread acceptance of blockchain technology. A harmonized set of federal and state rules – assuming they are reasonable – should encourage businesses to incorporate blockchain technology into their operations.
*Special thanks to Brennah Busch, our intern from Conestoga High School, for her contributions to this article.