New legislation has been proposed by New York state to authorize fiat-collateralized stablecoins as a form of bail.
New York Assembly Bill 7024 was introduced on May 10 as an act to amend the law. Its purpose is to establish regulations to permit stablecoins to be used for bail bonds.
The bill cited the current authorized methods of paying bail bonds which include cash, insurance, and credit cards.
However, it plans to amend the law to add an additional payment method in fiat-collateralized stablecoins. There was no mention of which particular stablecoins would be permitted.
The move follows proposed crypto regulations by New York Attorney General Letitia James. James also announced “landmark legislation to tighten regulations” on the crypto industry in the state on May 5. The acceptance of stablecoins in New York could pave the way for other states to follow suit.
New York’s Stringent Crypto Regulations
The Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act would require independent public audits of cryptocurrency exchanges. Furthermore, it would prevent individuals from owning the same companies, such as brokerages and tokens, to stop conflicts of interest.
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, the acceptance of stablecoins for bail bonds is a step in the right direction for New York State.
However, the NYAG has been actively cracking down on crypto companies recently. She has taken action against Celsius, CoinEX, and KuCoin so far this year.
Letitia James also opposed the Binance.US acquisition of embattled crypto lending platform Voyager.
Stablecoin Ecosystem Outlook
The stablecoin ecosystem has been in decline for the past year or so. The current market capitalization of all stablecoins is around $131 billion. Furthermore, this equates to roughly 11% of the total crypto market, a share that has been shrinking this year.
Tether remains the market leader with a 62% share and $82 billion USDT in circulation. Its supply has been steadily increasing this year while its competitors have contracted.
Since the beginning of 2023, the Tether supply has grown by 24% giving it a commanding market dominance.
Conversely, Circle has been shrinking and USDC accounts for just 23% of the market with $30 billion in circulation.
Binance USD (BUSD) has also been dwindling following regulatory action against its issuer Paxos. BUSD accounts for just 4.3% of the stablecoin market with a supply of $5.7 billion.
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