As digital assets gain wider adoption, a proposed law in New York would allow state agencies to accept cryptocurrency for government-related payments.
Assembly Bill A7788 would amend state financial laws to allow agencies to accept Bitcoin, Ether, Litecoin, and Bitcoin Cash. This would enable residents to use these digital assets to pay for fines, taxes, penalties, and other obligations.
The proposal also includes a clause allowing the state to charge a service fee to offset transaction costs or fees owed to crypto issuers.
Following the Lead
This move follows the example set by several states and cities that have started accepting digital asset payments. Colorado and Utah have been accepting cryptocurrencies for tax payments for years, and Louisiana recently announced it will be the first state to accept crypto payments for all state services.
Additionally, Detroit will accept crypto for tax and fee payments, making it the largest U.S. city to accept digital asset payments. While Detroit plans to accept many of the leading cryptocurrencies, it will also accept PayPal’s PYUSD stablecoin, as PayPal is facilitating all of the city’s crypto transactions.
The Model for Digital Assets Acceptance
The model for digital asset payments in Louisiana and Detroit could serve as a guideline for crypto payments around the country. In both cases, the public entity doesn’t directly hold any digital assets; all transactions are facilitated by a third-party provider.
This system addresses the volatility that has been one a key reason crypto hasn’t achieved broader acceptance. For instance, once a payment is made in Detroit, PayPal immediately converts the crypto to USD before it reaches the city’s accounts.
These types of integrations are likely to accelerate crypto’s momentum, even after a banner year last year. The increasing incorporation of digital assets technologies into the operations of key financial services providers and essential public organizations means crypto is more stable than ever, and further adoption is likely coming down the pike.
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