New York bill to accept cryptocurrency for state payments

A New York State assemblyman has proposed a bill to allow payments to public authorities to be made in cryptocurrency.

Clyde Vanel, who is chair of New York State’s banks committee and also chairs the subcommittee on internet and new technology, put forward the bill, which entails amending state finance law to allow state agencies to accept cryptocurrencies as a form of payment.

If passed, the bill – NY State Assembly Bill 2025-A7788, introduced on 10 April – would allow people to pay fines, rent, rates, taxes and other such fees to New York State agencies via cryptocurrencies. It serves as the latest example of growing interest in the US in cryptocurrency as a means of payment to the public sector.

Vanel has previously sponsored numerous tech-related bills, such as legislation to create a robotics, automation and artificial intelligence (AI) commission; and create a cryptocurrency and blockchain study taskforce.

New York State, whose state capital is the city of Albany (the state itself encompasses New York City), became the first US state to create a cryptocurrency taskforce ‘to study how to properly regulate, define and use cryptocurrency,’ according to a 2019 press release on Vanel’s assemblyman page.

RELATED ARTICLE Detroit to accept cryptocurrency for tax payments – a news story (13 November 2024) on Detroit’s city administration enabling residents to pay taxes and other city fees using cryptocurrency

‘Service fee’ provision

The bill defines cryptocurrency as ‘any form of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.’

Bitcoin, Ethereum, Litecoin and Bitcoin Cash are referenced by name in the bill, apparently as examples of cryptocurrencies. Bitcoin Cash is a ‘fork’ of Bitcoin, which is the world’s best-known cryptocurrency.

‘It shall be the option of the state to require, as a condition of accepting payment by cryptocurrency, that such person offering payment by such means pay a service fee to the state not exceeding costs incurred by the state in connection with the cryptocurrency payment transaction, including any fee owed by the state to the cryptocurrency issuer arising from that transaction,’ the bill sets out.

Just last month, Vanel put forward another bill – NY State Assembly Bill 2025-A6515, introduced on 5 March  – that aims to ‘establishes certain offences relating to crypto fraud’.

It is specifically looking to ‘establish the offences of virtual token fraud, illegal rug pulls, private key fraud and fraudulent failure to disclose interest in virtual tokens.’

RELATED ARTICLE Colorado starts taking tax payments in crypto – a news story (23 September 2022) on the introduction of a ‘Cryptocurrency’ payments option on Colorado Department of Revenue’s online payments portal

States open up to crypto

A growing number of states in the US have enabled people to make payments to public authorities in cryptocurrency.

For example, Colorado’s Department of Revenue began to accept tax payments in cryptocurrency more than two-and-a-half years ago (September 2022). Specifically, a ‘Cryptocurrency’ payments option was introduced on Colorado Department of Revenue’s online payments portal, with payments in crypto enabled for all taxes, including individual and business taxes, income tax, sales tax and withholding tax.

Cryptocurrency payments need to be made through online payments system PayPal and come with a ‘service fee’ of $1.00 (about £0.89) plus 1.83% of the payment amount. A Colorado Department of Revenue webpage (‘Cryptocurrency | Department of Revenue – Taxation’) tells visitors that ‘PayPal purchase fees or miner/gas fees [transaction fees charged by blockchain networks] may apply when transferring cryptocurrencies from an external wallet to your PayPal Cryptocurrencies Hub’; and that tax refunds will not be issued in crypto.

Utah and Louisiana also accept crypto for payments to public sector authorities, while – at the city level – Detroit’s Office of The Treasury announced last November (2024) that, starting ‘mid-2025’, residents would be able to pay taxes and other city fees using crypto.

Cities outside the US are also taking similar steps, typically driven by ‘pro-crypto’ civic leaders. The Canadian city of Vancouver passed a mayoral motion last December (2024) that aims to make the administration ‘Bitcoin-friendly’ – including investing in Bitcoin, as well as accepting payments in crypto. Twelve months previously the Swiss city of Lugano started accepting Bitcoin and Tether for all municipal payments.

RELATED ARTICLE Trump signs an executive order on digital financial technology – a news story (24 January 2025) on an executive order on ‘Strengthening American Leadership in Digital Financial Technology’

Trump’s crypto push

The moves come against the backdrop of US president Donald Trump’s stated ambition to make the US the ‘crypto capital of the world.’

Within the first week of his return to the White House in January, Trump signed an executive order – eagerly awaited across the cryptoassets sector – to ‘establish regulatory clarity for digital financial technology’; and kicked off the work of a new presidential working group on digital asset markets, chaired by David Sacks as White House artifical intelligence (AI) and crypto ‘czar’.

Last month (March), Trump – once upon a time a cryptocurrency sceptic – signed an executive order to create a ‘Strategic Bitcoin Reserve’ and ‘Digital Asset Stockpile’.

He also hosted a ‘Digital Assets Summit’ (also referred to as ‘Crypto Summit’) at the White House.

The Strategic Bitcoin Reserve will be capitalised with Treasury Department-owned Bitcoin that has been forfeited through criminal or civil asset forfeiture proceedings, according to the executive order. The Digital Asset Stockpile, meanwhile, is intended to be ‘a secure account for orderly and strategic management’ of the US’s ‘other digital asset holdings’, i.e. non-bitcoin crypto.