New York State Takes a Step Toward Cryptocurrency Adoption with New Bill
The state of New York has announced a new bill that would allow agencies to accept cryptocurrency as a form of payment for fines, civil penalties, taxes, fees, and other payments charged by the state.
Introduced on January 26 by Democratic Assembly Member Clyde Vanel, the New York State Assembly Bill A523 legislation suggests changes to the state’s current financial law to allow for the use of cryptocurrencies in payments to state agencies.
More specifically, the bill allows state agencies to enter into “agreements with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payment” for various types of fees, including “fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts, including penalties, special assessments and interest, owed to state agencies.”
The bill defined "cryptocurrency" as any form of digital currency that is governed by encryption methods and operates without the interference of a third party. It mentioned Bitcoin, Ethereum, Litecoin, and Bitcoin Cash as some of the more prominent cryptocurrencies that could be accepted as payment methods if the bill passes.
It is worth noting that the bill does not mandate state agencies to accept crypto as payment. On the other hand, it offers them the option to legally accept such payments if they agree.
The legislation, which was announced on Thursday, has been referred to the New York State Assembly Committee on Government Operations for further study and possible amendments.
Meanwhile, the New York state government has often taken a harsh stance toward the crypto market. The state passed a bill that banned nearly all cryptocurrency mining last year, and also requires businesses operating in crypto to have both a BitLicense and a traditional money transmitter license.
More recently, the New York State Department of Financial Services (NYDFS) released new guidance requiring companies to separate their own crypto assets from that of customers'. The move came after reports that there was co-mingling of funds between the now-bankrupt cryptocurrency exchange FTX and its trading arm Alameda Research.
Notably, the regulation and implementation of cryptocurrencies have been a hot topic following the unprecedented collapse of FTX. Just last week, the White House published a roadmap asking authorities to increase enforcement and ramp up efforts to regulate the crypto sector.
Still, there has also been some good news. As reported, US Congressman French Hill said he plans to promote a progressive regulatory framework for digital assets in order to make sure “America is the place for innovation in fintech and blockchain.”
In a report earlier this month, the World Economic Forum (WEF) said it believes blockchain technology will continue to be an "integral" part of the modern economy. The organization highlighted the widespread applications of cryptography and blockchain technologies, adding that their use in the financial services sector is already notable.