The New York state of the US is considering the implementation of stablecoins in its internal financial system. Regulators of the state have floated a proposal to let the residents pay and settle bail bonds in the form of stablecoins. This move has been proposed in accordance with New York’s plans to cautiously experiment with virtual digital assets. It, however, could be a few months before the fate of this proposal is sealed by the state authorities.
On May 10, the New York Assembly Bill 7024 was extended to the state legislative assembly, seeking an official payment mode status for stablecoins to pay bail bonds in state prisons.
“Authorises fiat-collateralised stablecoins as a form of bail; directs the commissioner of taxation and finance to promulgate rules and regulations identifying forms of fiat-collateralised stablecoin acceptable for posting bail to establish a system for the administration of the acceptance, recording, and processing of stablecoins as a means of securing bail,” the proposal said.
Stablecoins make for a distinct category of the crypto ecosystem. Pegged to reserve assets like gold or fiat currencies, stablecoins fare comparatively better than other altcoins in the infamously volatile crypto market.
By making bail bold payments acceptable as stablecoins, New York will be able to record all the sensitive information permanently and unchangeably on the blockchain network of choice. This would also reduce the laundering of cash inside the prison system, where the chances of it being stolen or misused are likely to be higher.
For now, the New York authorities have not revealed which stablecoins are they planning on integrating with their bail bond systems.
Tether, USD Coin, Ripple, and Binance USD are among popular stablecoins, all pegged to the US dollar, which could be taken into consideration.
The state has been discussing the ways in which it could explore use cases of crypto while also deciding the extent of these experiments.
In April last year, Kevin Thomas, a senator from New York proposed to add crypto-related scams under the category of criminal offenses.
The state, which has also emerged as a hub for crypto mining activities, has also witnessed internal opposition against allowing crypto miners to increase their power-intensive processes.
In October 2019, New York businesses reached out to governor Kathy Hochul asking for a ban on crypto mining, citing environmental concerns.
Among latest developments being reported from the region, the New York Senate is also mulling over a proposal to allow residents to pay fees, taxes, fines, and civil penalties in the form of cryptocurrencies like Bitcoin, Ether, Litecoin, and Bitcoin Cash.