Home News New York State Progresses Toward Cryptocurrency Adoption with New Bill

James Carter

29 Jan 2023

New York State Progresses Toward Cryptocurrency Adoption with New Bill

The New York state government has proposed a new law that, if passed, would allow state agencies to accept cryptocurrencies such as bitcoin and Ethereum as payment for state-imposed fines, civil penalties, taxes, fees, and other payments.

New York State Assembly Bill A523, which was proposed on January 26 by Democratic Assembly Member Clyde Vanel, is a piece of proposed legislation that suggests alterations to the state’s existing financial law in order to make it possible for cryptocurrency to be used in the process of making payments to state agencies.

To be more specific, the bill allows state agencies to make “agreements with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payment” for a wide range 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.”

A cryptocurrency is any digital currency that is managed by encryption mechanisms and works without the involvement of a third party, according to the bill’s definition of the term “cryptocurrency.” It included Bitcoin, Ethereum, Litecoin, and Bitcoin Cash as some of the more notable cryptocurrencies that might be accepted as payment methods if the bill is passed. Bitcoin Cash was also named as a cryptocurrency that could be accepted as a payment method.

It is vital to note that the measure does not require government agencies to accept cryptocurrency as a form of payment. On the other hand, it provides them with the opportunity to lawfully take such payments if they are willing to do so.

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The bill, the announcement of which took place on Thursday, has been sent to the Government Operations Committee of the New York State Assembly for additional investigation and, it is conceivable, changes.

In the meantime, the administration of New York state has frequently displayed a hostile attitude toward the cryptocurrency sector. Last year, the state legislature approved a bill that effectively outlawed the mining of cryptocurrencies. The law also mandates that companies that deal in cryptocurrencies be in possession of both a BitLicense and a standard money transmitter license.

More recently, the New York State Department of Financial Services (NYDFS) issued new recommendations requiring businesses to keep their own cryptocurrency holdings distinct from those of their clients. This was done in order to comply with the new regulations. The decision to take this action was made when it was discovered that the now-defunct cryptocurrency exchange FTX and its trading arm, Alameda Research, had mixed its customers’ monies.

After the unprecedented fall of FTX, one of the most popular topics of conversation has been the regulation and adoption of cryptocurrencies. Specifically, this has been the case since early this year. The White House just produced a road map requesting authorities to step up their attempts to regulate the cryptocurrency industry and boost the amount of time they spend on enforcement.

Despite this, there have been a few bright spots in the reporting. According to what has been reported, a member of the United States House of Representatives named French Hill has stated that he intends to work toward the promotion of a forward-thinking regulatory framework for digital assets in order to ensure that “America is the place for innovation in fintech and blockchain.”

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The World Economic Forum (WEF) expressed its belief, as stated in a report published earlier this month, that blockchain technology will continue to be an “integral” element of the modern economy. The organization underlined the widespread applications of cryptography and blockchain technologies and added that their use in the financial services sector is already noteworthy.