New legislation has been proposed by New York State to allow 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 create regulations to allow the use of stablecoins for bail bonds.
Bill Quote 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 collateralised stablecoins. There was no mention of any specific stablecoins that would be allowed.
The move follows proposed encryption regulations by New York Attorney General Letitia James. James also announced “historic legislation to tighten regulations” on the cryptocurrency industry in the state on May 5th. New York’s acceptance of stablecoins could pave the way for other countries to follow suit.
New York’s strict encryption regulations
The Crypto Regulation, Protection, Transparency, and Control Act (CRPTO) requires independent public audits of cryptocurrency exchanges. Moreover, it will prevent individuals from owning the same companies, such as brokerages and tokens, to stop conflicts of interest.
The regulations will also prohibit lending and borrowing of crypto assets. In addition, there will be restrictions on the tokens issued by the exchange under a conflict of interest clause.
However, accepting bail bond stablecoins is a step in the right direction for New York State.
However, NYAG has been cracking down on crypto companies lately. It has taken action against Celsius, CoinEX, and KuCoin so far this year.
Letitia James also opposed Binance.US’ acquisition of cryptocurrency lending platform Voyager.
Stable ecosystem outlook
The stablecoin ecosystem has been on the decline for the past year or so. The current market cap of all stablecoins is around $131 billion. Moreover, this equates to roughly 11% of the total crypto market, a share that is shrinking this year.
Tether remains the market leader with 62% share and $82 billion USD in circulation. Its supply has increased steadily this year while its competitors’ prices have contracted.
Since the beginning of 2023, the supply of Tether has grown by 24% giving it a strong market dominance.
Conversely, Circle is shrinking and USDC only represents 23% of the market with $30 billion in circulation.
Binance USD (BUSD) also waned after the regulatory action against its issuer, Paxos. BUSD represents only 4.3% of the stablecoin market with an offer of $5.7 billion.
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