The New York State Assembly has introduced a new bill that would support cryptocurrency as a form of payment for fines and taxes.
The bill in question would allow citizens to pay fines, civil penalties, taxes, fees and other payments charged by the state using cryptocurrencies. In essence, 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.
While the bill does not force agencies to accept payments via crypto, it does give them the freedom to legally agree to accept such payments. Moreover, according to the bill, these agreements should be enforced by the courts. According to cointelegraph.com, the bill defines cryptocurrency as any form of digital currency in which the generation of units of currency was performed using encryption techniques.
The list of recognised cryptocurrencies would include bitcoin, ethereum, litecoin, bitcoin cash, and potentially other digital assets. As for stablecoins such as USD Coin or Tether, they could also be recognised depending on how the bill is interpreted. For instance, since the supply of stablecoins is usually not regulated by cryptography but by the issuer, the bill would not recognise stablecoins as cryptocurrencies. However, the bill does acknowledge that some cryptocurrencies have issuers.
In order to become law, the bill still needs to pass through the New York Assembly and Senate before being signed by the state’s Governor.
New York’s attitude towards crypto
According to cnbc.com, in November 2022, New York has become the first US state to ban cryptocurrency mining as a result of energy-consumption concerns. This new law temporarily halts the renewal of air permits to companies that performed cryptocurrency mining operations out of former fossil fuel plants. However, the law did not apply to individual crypto miners, as it was aimed primarily at companies that used large amounts of energy for proof-of-work authentication.
Moreover, the state’s regulatory regime, commonly known as BitLicense, imposes a set of strict disclosure and consumer-protection requirements on any business that offers cryptocurrency-related services to New York residents.
According to cointelegraph.com, BitLicense is a business licence for using cryptocurrencies, which was issued on 8 August 2015 by the New York State Department of Financial Services (NYSDFS).
The licence defines the major rules on businesses operating with digital currencies, such as virtual currencies’ control, administration, maintenance, storing, issuing, holding, exchange operations, and software development. The licence applies to entities, while retailers and individuals are allowed to make transactions without it.
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