On Wednesday, the New York Assembly proposed a new bill to enhance the inclusivity of stablecoins in the state. The bill calls for amendment to the law and establish regulations to permit stablecoins to be used for bail bonds.
A bail bond is an agreement by a criminal defendant to appear for trial or pay a sum of money set by the court. The bail bond is co-signed by a bail bondsman, who charges the defendant a fee in return for guaranteeing the payment. The bail bond is a type of surety bond.
The introduced bill targets the current authorized methods of making payments for bail bonds which includes cash, insurance, and credit cards. It proposes to amend the law to add an additional payment method in fiat-collateralized stablecoins. However, there was no mention of which particular stablecoins would be permitted.
In particular, this move of taking a step in the direction of stablecoin is relatively different from the usual stance of the state towards cryptocurrencies and digital assets. Over the years, the state has been found to be strict towards the sector opting for even harsh measures like banning mining activities, etc.
However, with the Big Apple considering the acceptance of stablecoins in official procedures could pave the way for other states to follow. Recently, New York Attorney General Letitia James also proposed crypto regulations for the state which prioritizes investors’ safety.
Reportedly, the law proposed by Letitia titled “Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act” intends to mandate independent public audits of cryptocurrency exchanges. Furthermore, it aims to prevent individuals from owning the same companies, such as brokerages and tokens, to stop conflicts of interest.
Hence, the regulations would also prohibit lending and borrowing crypto assets. Additionally, there would be restrictions on exchange-issued tokens under the conflict of interest clause. However, if the state authorities approve the acceptance of stablecoins for bail bonds is a step in the right direction for New York State.
Nonetheless, the NYAG has been actively cracking down on crypto companies recently. She has taken action against Celsius, CoinEX, and KuCoin so far this year.
In recent times, regulators across the globe are brainstorming over the idea of including stablecoins in the larger financial market. While some entities are still hesitant about the role and nature of stablecoins, some authorities have advocated for making it a part of the financial system.
While the approach of New York of including stablecoins is different, other states in the US have also proposed regulations targeting stablecoins. The lawmakers in Texas, proposed the idea of adopting a government issued stablecoin that could be exchanged for gold and cash. According to the bill, the currency reserves must be 100% backed in gold and to prevent manipulation of the liquidity of the asset, lawmakers have also implemented preventive measures.