A measure that would allow state agencies to accept cryptocurrencies as a means of payment for fines, civil penalties, taxes, fees, and other charges imposed by the state was presented to the New York State Assembly on January 26. This law would take effect if it is passed.
Democratic Assembly Member Clyde Vanel, who is widely regarded as a crypto-friendly legislator, is the person responsible for the introduction of New York State Assembly Bill A523. It gives state agencies the authority to enter into “agreements with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payment” for a variety of different 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 measure does not mandate that state agencies accept cryptocurrencies as a form of payment; nevertheless, it does make it clear that state entities might legally agree to accept such payments, and that these agreements ought to be enforced by the judicial system.
The term “cryptocurrency” is defined in the proposed legislation as “any kind of digital currency in which encryption methods are employed to govern the formation of units of money including, but not limited to, bitcoin, ethereum, litecoin, and bitcoin cash.”
Stablecoins such as USD Coin (USDC) and Tether may or may not be included in this definition, depending on how the concept is understood (USDT). On the one hand, the issuer of the stablecoin rather than cryptography is often responsible for regulating the supply of the stablecoin. On the other hand, the bill does recognise that certain cryptocurrencies have a “issuer,” and it provides that agencies can charge the payor an extra fee if such a fee is charged by the cryptocurrency’s issuer. Additionally, the bill does recognise that some cryptocurrencies have a “mining pool,” but it does not recognise that some cryptocurrencies have a “mining pool.”
In order for the measure to be enacted into law, it will first need to get approval from both the Assembly and the Senate of New York, and then it will need to be signed by Governor Kathy Hochul.
Many people have the impression that the state government of New York is against cryptocurrencies. It wasn’t until November 2022 that New York became the first state to adopt a statute that effectively outlawed the mining of almost all cryptocurrencies. In addition to this, it has been attacked for the stringent “BitLicense” that it mandates all cryptocurrency exchanges get. In April of 2022, the Mayor of New York made the case that the legislation requiring a BitLicense ought to be overturned.