Today California Governor Jerry Brown signed two landmark pro-blockchain bills into law: AB 2658 by Assemblymember Ian Calderon and SB 838 by Sen. Robert Hertzberg. AB 2658 defines blockchain technology, updates the Uniform Electronic Transactions Act and establishes a working group with industry representation to create the best possible regulatory framework for blockchain within the state of California. SB 838 also defines blockchain technology and enables companies to record stock issuance and transfers using this technology.
Since 2012, the global number of blockchain businesses has grown steadily while the percentage of the those businesses headquartered in California has fallen from nearly 20% to just over 11%. One major factor driving where blockchain companies decide to headquarter — and as such, which economy benefits — is the existence of well-defined regulations. As noted in a Morgan Stanley report, “Regulatory certainty is part of the attractiveness for the companies so they can plan for the future as they know what to expect. Low taxes are a benefit.” By creating a more clear regulatory framework for blockchain companies, California is positioning itself to capture and retain more of these innovative businesses going forward.
“California has always been a place for innovation and opportunity, and SB 838 shows how we can use technology to increase consumer protection and help prevent cases of fraud,” said Senator Hertzberg (D-Van Nuys). “That it was signed into law is a great testament to the work being done around the state by folks like the Blockchain Advocacy Coalition to advance this rapidly growing technology.”
“As a complex, emerging technology, it is important to define “blockchain technology” in statute, as well as identify potential technical, regulatory, and governance hurdles, in order to provide greater certainty regarding the technology’s legal standing,” stated Majority Leader Calderon. “Throughout the legislative process we had tremendous feedback from innovators and companies who are already working with blockchain about how important this measure is to their industry. I’m grateful that Governor Brown recognized the importance of maintaining California’s position as a global leader in technology and innovation by signing AB 2658.”
“Blockchain has the potential to revolutionize many industries in the near future. It is vital that California recognizes and supports this industry as an economic driver in our state,” said Ally Medina, Director of the Blockchain Advocacy Coalition. “These are common sense bills that send the message that California supports innovation and the blockchain industry — Governor Brown, Senator Hertzberg and Assemblymember Calderon have all demonstrated the forward-thinking leadership we need in Sacramento.”