California Launches Effort to Examine How to Regulate Cryptocurrency
2022-05-09
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1California has become the first American state to launch an official effort to examine how to regulate digital monies.
2The effort began when Governor Gavin Newsom recently signed an executive order calling on state agencies to start considering new regulations.
3The order also requires officials to find safe ways to widely adapt the use of digital currencies - also called cryptocurrencies - across the state.
4A cryptocurrency is a form of money that does not exist in physical form.
5Governments and banks do not oversee it.
6A network of computers records cryptocurrency activity between users.
7This activity is included in a "ledger," or list, known as the blockchain.
8U.S. President Joe Biden ordered similar national action in March.
9Biden's order directed federal agencies to consider regulatory measures for cryptocurrencies.
10It also urged the Federal Reserve, the U.S. central bank, to explore whether it should create its own digital currency.
11California has the largest economy in the United States.
12Officials see the state as a good candidate for developing cryptocurrency and blockchain technologies.
13Dee Dee Myers is a top economic advisor to Governor Newsom.
14She told The Associated Press she thinks the technologies can be "an explosive creator" of new companies and jobs in California.
15She added that since the industry is still developing, it provides "another reason we want to engage early."
16Governor Newsom, a member of the Democratic Party, said in a statement that governments often fall behind in technology development.
17"So we're getting ahead of the curve on this."
18He added that his order is designed to start a process that aims to help citizens and businesses gain economically from cryptocurrencies.
19California has a population of about 39 million people.
20The state's economy is worth more than $3.1 trillion, larger than those of Britain and India.
21Newsom said the state hopes to "establish a comprehensive, thoughtful, and harmonized regulatory and business environment" for cryptocurrencies.
22The use of cryptocurrencies has sharply increased in recent years.
23An estimated 16 percent of American adults have invested in, traded, or used cryptocurrencies, the AP reports.
24The percentage is much higher among younger individuals.
25There is much debate over the legitimacy of cryptocurrencies, even among some of the world's wealthiest people.
26Tesla and SpaceX chief Elon Musk is a strong supporter of the technology.
27But billionaire investor Warren Buffet recently said he would not pay even $25 for all of the world's bitcoin, the most popular cryptocurrency.
28Each bitcoin is currently valued at about $37,000, but the rate rises and falls greatly.
29Hilary Allen is a financial regulation expert and professor at American University in Washington, D.C.
30She told the AP that California's effort can help legitimize the technology and make it more widespread.
31However, Allen said California's move to expand and regulate cryptocurrencies may not be the best thing for the state and its population.
32She said one reason for this is that private investors are most likely to benefit from the technology.
33Allen urged state officials to seek simpler technological solutions, rather than turning to technology that, in her words, "is by its very nature complex and inefficient."
34I'm Bryan Lynn.
1California has become the first American state to launch an official effort to examine how to regulate digital monies. 2The effort began when Governor Gavin Newsom recently signed an executive order calling on state agencies to start considering new regulations. The order also requires officials to find safe ways to widely adapt the use of digital currencies - also called cryptocurrencies - across the state. 3A cryptocurrency is a form of money that does not exist in physical form. Governments and banks do not oversee it. A network of computers records cryptocurrency activity between users. This activity is included in a "ledger," or list, known as the blockchain. 4U.S. President Joe Biden ordered similar national action in March. Biden's order directed federal agencies to consider regulatory measures for cryptocurrencies. It also urged the Federal Reserve, the U.S. central bank, to explore whether it should create its own digital currency. 5California has the largest economy in the United States. Officials see the state as a good candidate for developing cryptocurrency and blockchain technologies. 6Dee Dee Myers is a top economic advisor to Governor Newsom. She told The Associated Press she thinks the technologies can be "an explosive creator" of new companies and jobs in California. She added that since the industry is still developing, it provides "another reason we want to engage early." 7Governor Newsom, a member of the Democratic Party, said in a statement that governments often fall behind in technology development. "So we're getting ahead of the curve on this." He added that his order is designed to start a process that aims to help citizens and businesses gain economically from cryptocurrencies. 8California has a population of about 39 million people. The state's economy is worth more than $3.1 trillion, larger than those of Britain and India. Newsom said the state hopes to "establish a comprehensive, thoughtful, and harmonized regulatory and business environment" for cryptocurrencies. 9The use of cryptocurrencies has sharply increased in recent years. An estimated 16 percent of American adults have invested in, traded, or used cryptocurrencies, the AP reports. The percentage is much higher among younger individuals. 10There is much debate over the legitimacy of cryptocurrencies, even among some of the world's wealthiest people. Tesla and SpaceX chief Elon Musk is a strong supporter of the technology. But billionaire investor Warren Buffet recently said he would not pay even $25 for all of the world's bitcoin, the most popular cryptocurrency. Each bitcoin is currently valued at about $37,000, but the rate rises and falls greatly. 11Hilary Allen is a financial regulation expert and professor at American University in Washington, D.C. She told the AP that California's effort can help legitimize the technology and make it more widespread. 12However, Allen said California's move to expand and regulate cryptocurrencies may not be the best thing for the state and its population. She said one reason for this is that private investors are most likely to benefit from the technology. 13Allen urged state officials to seek simpler technological solutions, rather than turning to technology that, in her words, "is by its very nature complex and inefficient." 14I'm Bryan Lynn. 15The Associated Press reported this story. Bryan Lynn adapted the report for VOA Learning English. 16We want to hear from you. Write to us in the Comments section, and visit our Facebook page. 17________________________________________________________________ 18Words in This Story 19regulate - v. to control an activity or process, especially by using rules 20adapt - v. to change something to fit different conditions or uses 21engage - v. to interest someone in something and keep them thinking about it 22get ahead of the curve - phr. to be the first to do something that later becomes generally popular 23comprehensive - adj. including everything 24harmonize - v. to be suitable together, or to make different people, plans or situations suitable for each other 25legitimate - adj. permitted by law 26inefficient - n. not working well