Recently, New York State became the first state in the nation to create a cryptocurrency task force to study how to properly regulate, define and use cryptocurrency. Last week, NYS Governor Andrew Cuomo, signed into law THE DIGITAL CURRENCY STUDY BILL, A8783B/S9013.
According to assembly member Clyde Vandel, “New York leads the country in finance. We will also lead in proper fintech regulation. The task force of experts will help us strike the balance between having a robust blockchain industry and cryptocurrency economic environment while at the same time protecting New York investors and consumers.”
The task force will be made of nine members including technologists, consumers, enterprises, and investors. According to the bill, it will provide the governor and the legislature “with information on the effects of the widespread use of cryptocurrencies and other forms of digital currencies and their ancillary systems in the state.” The task force’s first task is to submit a report on or before December 15, 2020, including, but not limited to, the following information:
- A review of the blockchain industries in New York
- The number of cryptocurrencies currently being traded and their market share
- The number of crypto exchanges operating in New York state and their average monthly trade volume
- The types of investment firms that are large investors of cryptocurrencies
- The energy consumption of crypto mining operations
- The potential market manipulation and other illegal activities in the crypto industry
- Legislative and regulatory recommendations
Julie Samuels, Executive Director of Tech:NYC:
“Cryptocurrencies and blockchain technology will, without a doubt, greatly impact finance and many other industries across the globe for years to come. New York’s cryptocurrency task force – the first of its kind in the nation – shows how our state is leading the way in studying and understanding these technologies to ensure they can thrive in a responsible and effective way, further solidifying New York’s position as a global hub for smart innovation.”
Cryptocurrencies, like Bitcoin, Ethereum, Litecoin and Ripple are digital assets designed to work as a medium of exchange that uses strong cryptography to secure transactions.
Cryptocurrency, however, is more than just an asset that stores value. It is used as currency, a means to exchange for goods and services. It is also used to record contracts and transactions. Cryptocurrency tokens are also used as utility tokens that can record or store information; from how long someone browses a website to rewarding behaviors.
Even more interestingly, the technology that undergirds cryptocurrency, blockchain technology, can be used in countless applications in the public and private sectors to improve transparency and efficiency. In fact, our government should consider blockchain uses with elections, the recordation of vital records and real estate transactions; to name a few.
Surprisingly, cryptocurrency, blockchain technology, is still at its infancy stage. The document explaining blockchain technology, THE BITCOIN WHITEPAPER, was published on October 31, 2008, almost ten years ago.
In the early days, too often there were instances of Bitcoin exchanges getting hacked and people losing their holdings. In response to a major exchange compromise, in 2015, under Governor Cuomo, New York State’s Department of Financial Services promulgated the BitLicense to protect New Yorkers on cryptocurrency exchanges. New York was first to act and to this day, the BitLicense is modeled by many states and countries.
It has been in ten years since the advent of cryptocurrency. It has been nearly four years since the implementation of the BitLicense. In the cryptocurrency space and technology in general, a few months is equivalent to years.
This new crypto task force will be adding more regulations to the cryptocurrency space.