The bill aims to allow state agencies to legally accept cryptocurrency payments. These agreements would then be enforced by the courts. This method of payment would apply to fines, civil penalties, taxes, fees and other charges imposed by the state. The project was introduced in the New York State Assembly on January 26, 2023.
Form and substance of the bill
New York State Assembly Bill A523 was introduced by a Democratic member. This is Clyde Vanel, sitting in the Assembly. This one is often considered as a politician favorable to cryptocurrencies. It allows state agencies to enter into “agreements with individuals to provide for the acceptance by state offices of cryptocurrencies as means of payment” for various types of fees.
These costs include, but are not limited to, fines, civil penalties, rents, rates, taxes. To this first list may be added revenues, financial obligations or other amounts, including penalties, special assessments and interest, due to state agencies. The bill does not require state agencies to accept crypto as payment. Instead, it clarifies that state agencies can legally agree to accept such payments. These agreements must then be enforced by the courts.
The bill defines cryptocurrencies as any form of digital currency in which encryption techniques are used to regulate the generation of monetary units […] including but not limited to bitcoin, ethereum, litecoin and bitcoin cash. Depending on how this definition is interpreted, it may or may not include stablecoins like USD Coin and Tether. For one thing, the supply of stablecoins is usually regulated by the issuer rather than the cryptocurrency. On the other hand, the bill recognizes that some cryptocurrencies have an issuer, and it provides that agencies may charge the payer additional fees if such fees are charged by the issuer of the cryptocurrency.
New York State: Hostile to cryptocurrencies?
To become law, the bill would need to be passed by the New York State Assembly and Senate? Then the law must be signed by the governor of the state, Kathy Hochul. The New York State government is often seen as hostile to cryptocurrencies.
In November 2022, New York became the first state to pass a bill banning virtually all cryptocurrency mining. It has also been criticized for the restrictive “BitLicense” that it requires to acquire for all cryptocurrency exchanges. In April 2022, the mayor of New York argued that the BitLicense law should be repealed.
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