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Gov. Newsom Issues Executive Order on Crypto and Blockchain

Governor Newsom Issues Executive Order allowing California to assess using blockchain technology in state operations – DEEDE News Media

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Governor of California Gavin Newsom issues executive order on crypto - DEEDE News Media
  • Governor Gavin Newsom issues executive order on blockchain aligns with the Biden administration proposal in March.
  • The governor is calling on the state of California to look into using the technology in state operations.
  • California aims to create a transparent and consistent business environment for companies operating in Web3.

Over the course of a decade, tech investors and businesses in California have bet on the future of digital currency. Just recently, the governor of the State with the largest economy is now a part of the movement.

On Wednesday, the Governor of California, Gavin Newsom issued an executive order on cryptocurrencies, laying out a road map for regulatory and consumer protections and examining ways the state can take advantage of the technology.

This comes as the Senate of the State of Virginia passes House Bill 263, allowing state banks to participate in the services of cryptocurrencies.

Senior advisor to Newson, Dee Dee Myers, tells CNBC:

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 goal of the order is to create a transparent and consistent business environment for companies that are operating in Web3 technologies. New regulatory frameworks for companies that operate in California will also be helped by this.

Agencies within the Newson administration are required to submit their findings and recommend next steps.

According to the order, it will “reflect consultation with relevant state agencies regarding the forthcoming federal reports on the relationship of crypto assets to priorities in energy, climate, and preventing criminal activity.”

Myers said the agencies plan to hold roundtables and listening sessions with industry leaders, consumer advocates, and even critics.

The White House is in the process of economic reform and new legislation continues to be introduced almost daily. With cities like Miami aiming to become the “Wall Street of Cryptocurrencies,” we may see a spike in adoption much sooner than expected.

Currently, there are over 30 States drafting legislation in support of Biden’s Executive Order, which addresses the responsible development of digital assets.

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Policy

Inflation is Killing The Poor: Bezos Blasts Biden Admin

Inflation is Killing the Poor. Amazon Founder, Jeff Bezos Blasts the Biden Administration Over Comments on Inflation in a Tweet on Sunday.

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Inflation is killing the poor: Amazon CEO Jeff Bezos and President Joe Biden Discuss Inflation

Inflation is killing the poor.

President Joe Biden was criticized for the second time this week for his comments on inflation by Amazon founder Jeff Bezos, who said on Sunday that inflation is most harmful to the least affluent in the United States.

“In fact, the administration tried hard to inject even more stimulus into an already over-heated, inflationary economy and only Manchin saved them from themselves,” Bezos wrote on Twitter. “Inflation is a regressive tax that most hurts the least affluent. Misdirection doesn’t help the country.”

The comments from Bezos were in response to a thread in which President Joe Biden claimed the US was on track to see its largest yearly deficit, totaling $1.5 trillion.

Is Inflation Slowing Down?

According to data recently released by the U.S. Bureau of Labor Statistics, consumers’ prices rose less than expected last month. The Consumer Price Index for All Urban Consumers (CPI-U) is a measure of the average change over time in the prices paid for a market basket of consumer goods and services.

The year-over-year increase in the consumer price index was 8.3% in April, not adjusted for seasonal factors, compared to historic increases in February and March.

The spike in the inflation rate in March was the greatest in more than three decades, where the CPI rose 8.5 percent. Prices reached historic highs in February 2022, with inflation rising by 7.9 percent.

The numbers in April didn’t shatter any records, however. Real estate, gas, food, airline fares, and new vehicles are some of the items that are hurting American pocketbooks due to inflation.

Inflation is Killing Gas Prices

National Average Gas Prices | Source: AAA

Taxing the Wealthy

On Friday, Bezos called out President Biden for suggesting that taxing wealthy corporations could lower inflation, urging a newly formed Disinformation Board to take a look at the statement.

“Raising corp taxes is fine to discuss,” Bezos wrote on Friday.

“Taming inflation is critical to discuss. Mushing them together is just misdirection.”

Comments from both President Biden and Bezos come as mass corporate layoffs hit numerous industries.

As of March, roughly 64.4 percent of American families, or 166 million adults, reported they were living paycheck to paycheck, according to research by LendingClub and PYMNTS.

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Policy

Fed: ISO 20022 Reserve Banks to Globally Merge Cash Transfer Regs

ISO 20022 Standards will enhanced efficiency of domestic and global payments that may help banks and other entities with sanctions and AML requirements.

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ISO 20022 Federal Reserve Banks to Merge Wire Transfer Regulations Globally - DEEDE News Media
  • Fed Announces that Reserve Banks will adopt ISO 20022 Standards
  • Current banking language makes it difficult to efficiently process wire transfers globally.
  • ISO 20022 compliant cryptos include Bitcoin, Iota, and Algorand.

On Monday, May 2, 2022, the Federal Reserve Board announced that Federal Reserve Banks will adopt the ISO® 20022 message format for the Fedwire® Funds Service.

According to a press release by the Federal Reserve, this new format will allow for an “enhanced efficiency of both domestic and cross-border payments, and a richer set of payment data that may help banks and other entities comply with sanctions and anti-money laundering requirements.”

Virginia Senate Passes Bill Allowing State Banks to Offer Crypto Services

ISO 20022 was presented by the organization as a means of developing communication between financial institutions. The new standards propose that it will make financial transactions more efficient, unlike today’s standards. Currently, banking institutions are using their own programming languages, making it difficult to transfer funds internationally.

The ISO 20022 was developed by the International Organization for Standardization, an independent, non-governmental organization that addresses and issues standards for a wide range of industries, including financial institutions.

The revised plan for migrating the Fedwire Funds Service to the new message format was invited for public comment by the Board, saying:

Comments are due 90 days after publication in the Federal Register, which is expected shortly.

The Board wants the Reserve Banks to adopt the new message format on a single day instead of in three separate phases as previously proposed.

Cryptocurrencies to keep an eye on that are compliant with ISO 20022 proposed messaging standards include: Bitcoin (CCC:BTC-USD), XDC (CCC:XDC-USD), Iota (CCC:MIOTA-USD), and Algorand (ALGO-USD).

Ripple (CCC:XRP-USD), and Stellar Lumens (CCC:XLM-USD) are not only ISO 20022-compliant, but they are also members of the ISO 20022 Standards Body, according to the Registration Management Group Member List website.

The Fedwire Funds Service is a real-time gross settlement system that’s owned and operated by the Federal Reserve Banks.

It allows businesses and financial institutions to transfer funds quickly and securely, and it’s a vital tool for the global economy.

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Virginia Senate Passes Bill Allowing Banks To Offer Crypto Services

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Virginia Senate Passes Bill Allowing Banks To Offer Crypto Services - DEEDE News Media
  • Virginia Senate passes bill allowing state banks to offer custodial services for bitcoin and other cryptocurrencies.
  • To determine whether or not to offer custodial services, banks will have to follow self-assessment criteria.
  • New virtual currency private keys must be generated for and held by the bank if they choose to operate as a fiduciary.

Passing HB 263 comes soon after Blackrock launched a crypto ETF allowing investors exposure to the cryptocurrency sector.

Senate member for the state of Virginia, Christopher T. Head introduced House Bill 263 in early January 2022.  HB 263 allows traditional banks operating in the Commonwealth of Virginia to offer custodial services for Bitcoin and other cryptocurrencies.

To offer custodial services, banks must go through a process of self-assessment that requires them to carefully examine the risks involved in offering such services.

Virginia House Bill 263 outlines:

A bank may provide its customers with virtual currency custody services so long as the bank has 26 adequate protocols in place to effectively manage risks and comply with applicable laws.

Proper insurance and maintenance of the service are required.

The bill goes on to state that in addition to all of the requirements in the legislation, banks must implement effective risk management, controls for measuring, and control of relevant risks associated with cryptocurrencies.

Under the proposed law, banking infrastructure could participate in a fiduciary or non-fiduciary capacity.

Any financial institution that wants to operate in a fiduciary manner:

“Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank.”

If a bank wants to operate in a non-fiduciary manner:

“In providing such services in a non-fiduciary capacity, the bank shall act as a bailee, taking possession of the customer’s asset for safekeeping while legal title remains with the customer, meaning that the customer retains direct control over the keys associated with their virtual currency.”

With a unanimous 39-0 vote, the Virginia Senate passed the bill allowing banks to offer virtual currency custody services.

Virginia House Bill 263 finally heads to Governor Glenn Youngkin’s desk to be signed into law.

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