On May 10, 2023, Latrice Walker, a Democrat in the New York State Legislature, introduced a bill with partisan support that aims to include stablecoins pegged to the US dollar as a recognized form of payment for bail bonds.
The proposed bill seeks to expand the options for payment methods for bail bonds, which currently include cash, insurance bonds, and credit cards. Including fiat-collateralized stablecoins would require amendments to the state’s criminal procedure law to encompass these digital assets backed by fiat currency.
However, it is unclear which specific major fiat-collateralized stablecoins would fall under this new category and whether there would be any restrictions on certain stablecoins by New York authorities.
While the New York state government seems open to incorporating stablecoins into its criminal procedure law, Letitia James, the State’s Attorney General, has taken a harsh stance on cryptocurrencies in recent months.
James initiated legal action against former Celsius CEO Alex Mashinsky on January 5, 2023, and more recently filed a lawsuit on March 9 against the Seychelles-based crypto exchange Kuoin for allegedly selling securities and commodities without proper registration. Additionally, on February 23, 2023, James sued CoinEx, a cryptocurrency exchange, for misrepresenting itself as an exchange by failing to register as a securities and commodities broker-dealer in the state.
The introduction of this new bill is coming barely a week after James introduced the CRPTO Act to the state’s legislature. The CRPTO Act seeks to establish guidelines for cryptocurrency companies that prioritize the protection of consumers and investors, requiring them to conduct independent audits and disclose financial statements. It mandates independent audits and the disclosure of financial statements by these companies. The bill also requires compensation for clients who have been defrauded and grants New York officials the authority to issue subpoenas, impose civil penalties, and shut down companies suspected of engaging in illicit activities.
Walker’s and James’s bills are yet to be discussed or passed in the New York State Assembly.
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