New York Proposes Bill Allowing State Agencies to Accept Cryptocurrency Payments

A New York lawmaker has introduced legislation that would allow state agencies to accept cryptocurrency payments, signaling growing political momentum for digital asset integration in public services. Assembly Bill A7788, introduced by Assemblyman Clyde Vanel, seeks to amend state financial law to allow New York state agencies to accept cryptocurrencies as a form of payment. It could permit state agencies to accept payments in Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), according to the bill’s text. State offices could authorize crypto payments for “fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts,” as well as penalties, special assessments and interest.

Cryptocurrency legislation is becoming a focal point in New York, with Bill A7788 marking the state’s second crypto-focused legislation in a little over a month. In March, New York introduced Bill A06515, aiming to establish criminal penalties to prevent cryptocurrency fraud and protect investors from rug pulls. Crypto-focused legislation has gathered momentum since the US President took office, signaling during his campaign that his administration intends to make crypto policy a national priority, as well as making the US a global hub for blockchain innovation.

If passed, the bill would mark a significant shift in how New York handles digital assets. It would allow state entities to integrate cryptocurrency into the payment infrastructure used for collecting public funds. The proposal also includes a clause allowing the state to impose a service fee on those choosing to pay with crypto. According to the text, the state may require “a service fee not exceeding costs incurred by the state in connection with the cryptocurrency payment transaction.” This could include transaction costs or fees owed to crypto issuers. Assembly Bill A7788 has been referred to the Assembly Committee for review and may advance to the state Senate as the next step.

New York’s legislation comes shortly after the state of Illinois passed a crypto bill to fight fraud and rug pulls. The bill, submitted by Assemblyman Clyde Vanel, aims to explore the potential of blockchain technology in enhancing election security and combating voter fraud. The proposal, introduced to the Assembly Election Law Committee, would instruct the New York State Board of Elections to assess the use of onchain systems to present "uncensored truth" during democratic decision-making. If approved, the Board would need to study relevant activities in other states and present its findings within 12 months. The draft is currently under committee review and, if it gains traction, will proceed to the Assembly floor for further discussions before moving to the New York Senate and ultimately to the Governor's office for final approval.

New York has been increasingly involved in blockchain and crypto regulation in recent years. In 2023, the New York State Cryptocurrency and Blockchain Study Task Force was established to examine the economic and environmental impact of digital assets. The state's attention on Bitcoin and digital currencies has surged with the re-election of the US President, who issued an executive order for a Strategic Bitcoin Reserve, joining a multi-state race to invest in BTC. The proposed bill could pave the way for wider adoption of cryptocurrency and blockchain technology in the public sector, potentially driving innovation and efficiency. Assemblyman Clyde Vanel has previously pushed for the establishment of a task force to study the potential of blockchain technology in government operations. The bill, if passed, would allow the state government to accept cryptocurrency payments, marking a significant step towards integrating digital assets into state financial systems. The data on the ledger would be protected with cryptography, ensuring immutability and audibility, and providing an uncensored truth. This move could enhance transparency and security in state operations, paving the way for a more efficient and secure financial system.