Companies and government agencies are making great efforts to increase the adoption of cryptocurrencies. Recently, a bill was introduced in the New York State Assembly on January 26, 2023 that would allow state agencies to accept crypto as a form of payment for civil penalties, taxes, fines, and any other payments levied by the state.
Crypto-friendly politician and Democratic Assemblyman, Clyde Vanel, introduced House Bill A523 in the New York State Assembly. The draft law allows government agencies to enter into “agreements with persons for government offices to accept cryptocurrencies as a means of payment.” This would include various charges such as “fines, civil penalties, rent, rates, taxes, fees, charges, revenues, financial obligations or other amounts, including penalties, special assessments and interest, owed to governmental agencies.”
While the bill does not force government agencies to accept crypto payments, it clarifies that they can now legally agree to accept such payments, and the appropriate courts should enforce those agreements.
The bill defines cryptocurrency as any digital currency that uses encryption techniques to generate and regulate monetary units. This definition is not limited to BTC, ETH, LTC and bitcoin cash.
Now, depending on how the country understands the definition, stablecoins may or may not be part of the game. For example, the supply of a stablecoin is regulated by its issuer, not cryptography; also, the account does not understand that some cryptocurrencies have an issuer. Therefore, agencies may charge an additional fee from the payer if the cryptocurrency issuer charges it.
The bill now needs to be passed by the New York Assembly and Senate, and must be signed by the state’s governor, Kathy Hochul, to become law.
Although it may not be easy, the country does not have a good image with crypto. In November 2022, NY banned all cryptocurrency mining, becoming the first state to do so. The state also came up with a BitLicense, requiring all crypto exchanges operating in the state to have one. However, the mayor of New York has discussed revoking the BitLicense in April 2022.
State Senator Sydney Kamlager of California introduced SB 1275 on February 19, 2022. This would allow residents of the Golden State to pay for government services using cryptocurrencies. At the same time, political advisers were seen pushing a proposal that would allow Bitcoin to be accepted as legal tender in the country.
Republican State Senator, Wendy Rogers, introduced House Bill 1341, seeking to accept Bitcoin as legal tender in the Grand Canyon State.
It has become the first country to accept crypto for tax payments, with plans to extend this to driver’s license fees, hunting fees and more. The state’s governor, Jared Polis, signed the Digital Tokens Act into law in September 2022, allowing citizens to pay their taxes in cryptocurrencies.