Sen. James Sanders Jr. (D.NY) has introduced a bill to establish a crypto research taskforce to study the status and impact of blockchain and digital assets in New York State.
According to documents from the New York Senate, if passed, the crypto research taskforce will assess crypto exchange activities, trade volumes, environmental sustainability, tax implications, and the current regulatory framework relating to the crypto industry. James Sanders Jr. proposes that the task force report back to the Senate and suggest appropriate reforms by December 15, 2027.
Impact on the Economy at Large
Dubbed the New York State Cryptocurrency and Blockchain Study Act, the crypto research taskforce will have 17 members. The members would review the state of digital assets and identify their impact on the state’s economy. The document stated that among its duties would be to:
“Investigate the effects of the widespread use of cryptocurrencies and other forms of digital currencies and their ancillary systems.”
Members of Crypto research Task Force will not be Compensated
Academic experts in finance, environmental conservation groups, and representatives from the Department of Financial Services would be among those to be included in the crypto research task force. The proposed bill explains that the members would serve without compensation, though their expenses would be reimbursed. From the date of the bill’s passing, the crypto research taskforce would be appointed within 90 days and expected to make proposals about a future crypto policy framework for the city of New York.
New York has the Toughest Crypto Regulations
The proposal for a crypto research taskforce by James Sanders Jr. comes at a time when at least 20 US States are at different levels of considering crypto legislation and proposals for enacting strategic Bitcoin Reserve Bills. According to the head of digital research at VanEck, researcher Matthew Sigel, the efforts by the US States to invest in Bitcoin could create a $23 billion demand for Bitcoin. Currently, the state of New York has some of the toughest crypto regulations within the United States, thanks to the BitLicense framework implemented in 2015.
New York’s Department of Financial Services (NYDFS) keeps the crypto industry under watch. It requires crypto market players to apply for a BitLicense or a limited-purpose trust charter. Experts argue that the current legislative requirements have stilled the industry, making it difficult for crypto firms to comply, and as a result, they bypass the state and look for a better environment elsewhere. The statement by Sanders added:
“New York is competing with London, Tokyo, Shanghai, and Hong Kong for financial investments […] position as a fiscal leader.”
Conclusion
The establishment of a crypto research taskforce, as proposed by Sen. James Sanders Jr., will not be the first time New York has attempted to investigate the crypto situation. Two previous attempts date back to 2019. Despite establishing the New York State Cryptocurrency and Blockchain Study Task Force, signed by then-Governor Andrew Cuomo, nothing much came out of it. The state revisited the ideas with a similar initiative in 2023, but Governor Kathy Hochul vetoed the bill.
Frequently Asked Questions (FAQs)
Is cryptocurrency legal in New York?
The state’s regulation, 23 NYCRR 200.3(a), states, “No Person shall, without a license obtained from the superintendent… engage in any Virtual Currency Business Activity.”
Who regulates crypto in the US?
Cryptocurrencies are classified as “digital commodities” and are therefore regulated by the CFTC if the blockchain network to which a cryptocurrency relates is both “functional” and certified as “decentralized.”
Are there crypto exchanges operating in New York?
The leading cryptocurrency exchanges licensed in New York include Coinbase and Gemini.
Does Binance exchange operate in the US?
Binance is currently restricted in the US. It is not available in Alaska, Hawaii, Maine, New York, Texas, and Vermont.
References
Appendix Glossary of Key Terms
Cryptocurrency: A digital currency, an alternative form of payment created using encryption algorithms.
Legislative Bill: A proposed law that can introduce new legislation, change existing laws, or repeal laws.
Taskforce: A specialized team of people assigned to deal with a particular problem, goal, or piece of work
Regulation: The legal and procedural frameworks governments enact to shape many different aspects of digital assets.
