New York State Assembly Introduces Bill to Allow Bitcoin and Cryptocurrencies to Be Used for Taxes and Other Payments

A new bill introduced in the New York State Assembly aims at allowing people to use Bitcoin and other cryptocurrencies to pay taxes and access state services.

A new bill, A7788, has been introduced at the New York State Assembly to allow state departments to accept digital currencies for taxes, penalties, fees, and other official services.

The bill, which is sponsored by Assemblymember Clyde Vanel, would permit the usage of major cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, in transactions with the state. It also allows for a transaction fee to be added for those using crypto.

If passed, this measure would see the North American state become the first in the U.S. to fully integrate crypto into government systems. It would be part of a wider move to modernize how the government processes transactions.

Each state agency is authorized to enter into agreements with persons to provide the acceptance, by offices of the state, of crytocurrency as a means of payment of fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts, including penalties, special assessments and interest, owed to state agencies.

The bill comes amid an increasing interest in the use of blockchain technology in government operations. It would allow residents to settle state payments with cryptocurrency, with an additional service cost being applied.

It is the latest development in New York’s stance on crypto. Despite bitcoin proponents voicing support for the bill, it faces an uphill battle.

While the bill highlights an increasing acceptance of cryptocurrencies, many experts, including New York Attorney General Letitia James, continue to advise against the unregulated use of crypto.

Recently, Attorney General James penned a letter to Congress, highlighting the urgent need for increased federal control over the cryptocurrency business. Without clear national norms, digital currencies could destabilize the dollar and compromise national security.

In her correspondence, Attorney General James pointed out that bad actors could exploit cryptocurrencies to funnel funds into illegal financial operations. This would allow them to circumvent traditional banking systems, which are already subject to scrutiny and anti-money laundering (AML) regulations.

Moreover, there are burgeoning concerns regarding the implications of adopting cryptocurrencies for government payments in terms of security and privacy. Since cryptocurrency transactions are frequently viewed as susceptible to fraud and money laundering activities, experts contend that the establishment of strict rules is paramount to ensure the safety and trustworthiness of these payments.