NY Senator Proposes 17-Member Crypto Task Force for Revenue Study

TLDR

• New York Senator James Sanders Jr. introduced a bill to create a 17-member crypto task force to study digital assets’ impact on state revenue and environment, with findings due by end of 2027
• The proposed task force would include representatives from Department of Financial Services, environmental groups, and economic experts who would serve without pay but receive expense reimbursements
• New York maintains some of the strictest crypto regulations in the US through its BitLicense framework implemented in 2015, making it a challenging market for many crypto firms
• This is the third attempt at establishing such a task force in New York since 2019, with previous attempts either failing to convene or being vetoed by Governor Hochul
• The initiative comes as 20 other US states consider crypto investment legislation that could potentially drive $23 billion in Bitcoin demand

New York State Senator James Sanders Jr. introduced a bill on Wednesday that aims to establish a cryptocurrency task force, marking the state’s third attempt since 2019 to create such a panel. The proposed group would study digital assets’ effects on state revenue and environmental impact, with findings expected by the end of 2027.

The bill, currently under review by a Senate committee, calls for the creation of a 17-member panel. These experts would examine how cryptocurrency impacts state tax revenue, environmental concerns, and market transparency, according to the official bill text.

The task force would bring together representatives from various sectors, including the Department of Financial Services, environmental conservation groups, and academic experts in economics. Members would not receive payment for their service but would get reimbursement for expenses related to their duties.

If approved, the bill requires member appointments within 90 days of becoming effective. The panel’s work would help shape future cryptocurrency policy in New York City, which Sanders describes as “arguably the financial capital of the world.”

New York Regulations

The initiative comes as New York maintains some of the most stringent cryptocurrency regulations in the United States, largely through its BitLicense framework established in 2015. This system, overseen by the state’s Department of Financial Services, requires cryptocurrency businesses to obtain either a BitLicense or a limited-purpose trust charter to operate within the state.

These strict requirements have created barriers for many cryptocurrency companies, with some choosing to avoid New York entirely rather than navigate its regulatory landscape. However, some firms have successfully obtained approval, such as Anchorage Digital, which recently secured a BitLicense to offer crypto trading services to New York institutions.

The proposed task force would examine New York’s position among 20 other U.S. states currently considering cryptocurrency investment legislation. According to Matthew Sigel, head of digital assets research at VanEck, these combined state efforts could potentially drive $23 billion in Bitcoin demand.

Sanders emphasized New York’s competition with other global financial centers, including London, Tokyo, Shanghai, and Hong Kong. He stressed the importance of maintaining the state’s “position as a fiscal leader” in his official statement.

The senator pointed to blockchain technology’s effects on innovation, employment, economic growth, and environmental issues as key areas for study. He suggested that findings could help “supplement the BitLicense with the correct legislative framework.”

This latest proposal follows two previous attempts to establish similar initiatives. In 2019, then-Governor Andrew Cuomo signed legislation to create the New York State Cryptocurrency and Blockchain Study Task Force. However, according to Jason Brett, founder of the Value Technology Foundation, this task force never actually met.

A second attempt came in 2023 when the state passed another bill to re-establish the task force. Governor Kathy Hochul vetoed this legislation, adding another setback to New York’s efforts to study cryptocurrency’s impact.

Brett, who previously held positions at the Chamber of Digital Commerce and ConsenSys, expressed doubt about the current proposal’s chances of success. He noted that other similar proposals faced challenges due to concerns over unbudgeted expenditures totaling $35 million.

The proposed task force would need to deliver its findings on cryptocurrency’s impact on state revenue and environmental concerns by the end of 2027. These results could shape how New York approaches digital asset regulation in the future.

Members would examine various aspects of cryptocurrency’s influence on the state, including its effects on tax revenue, environmental impact, and market transparency. Their work would aim to provide a comprehensive understanding of how digital assets affect New York’s economy and environment.

If approved, the initiative would represent New York’s most recent effort to understand and regulate the cryptocurrency industry while maintaining its position as a global financial hub.