It’s official: New York has introduced a bill that would accept Stablecoins as a form of bail payment.
Specifically, the proposed new US legislation on the matter will undoubtedly have an impact on the digital asset landscape. Here are all the details.
The US Stablecoin Bill: What does it contain?
As we know, stablecoins are among the most popular digital asset offerings the industry has created to date. Moreover, the stability they gain from being backed by fiat currencies gives them the potential for easier integration.
Now, the new legislation proposed by New York aims to do just that. In fact, New York has introduced a new bill that, as anticipated above, would accept stablecoins as a form of bail payment.
Not only that, but the bill would also amend the existing acceptable forms of bail payment, which include cash, credit cards and various bonds, to include the digital asset class.
Assembly Bill Number 7024 would therefore amend the existing Criminal Procedure Code to include the class of digital assets.
In addition, the legislation states its intention not to allow “fiat backed stable coins as a form of bail” within the state.
Specifically, the new legislation states that ‘fiat backed stablecoins’ will be introduced as an acceptable form of payment under the amended criminal procedure.
Subsequently, the passage of the bill could pave the way for a variety of stablecoin implementations in the state and beyond.
We see this development coming after New York Attorney General Letitia James proposed new regulations for cryptocurrencies.
In addition, James announced ‘landmark legislation to tighten regulations’ on the digital asset industry in the state.
By contrast, the Stablecoin Bill appears to be a step in the right direction. In other words, amidst the regulatory uncertainty of the sector in the US, developments like this will certainly not go unnoticed.
However, the debate surrounding the country’s digital asset sector will continue to be important, especially with a general election coming up next year.
Cryptocurrency legislation proposed by Letitia James
As expected, a few days ago, New York Attorney General Letitia James announced historic legislation to strengthen regulation of the cryptocurrency sector in order to protect investors, consumers and the economy as a whole.
Specifically, Attorney General James’ bill, which proposes a series of regulations on crypto, would increase transparency, eliminate conflicts of interest, and impose common sense measures to protect investors, in line with regulations imposed on other financial services.
In detail, we see that the bill would require independent public audits of crypto exchanges and prevent people from owning the same companies, such as brokers and tokens, to prevent conflicts of interest.
In addition, crypto platforms would have similar responsibilities to customers as banks under the Federal Electronic Fund Transfer Act, which requires platforms to compensate customers who are victims of fraud.
Finally, the bill would also strengthen the New York State Department of Financial Services’ (DFS) authority to regulate digital assets. Attorney General James said:
“Rampant fraud and malfunctions have become the hallmarks of cryptocurrency and it is time to bring law and order to the multi-billion dollar industry. New York investors should have peace of mind that there are safeguards in place to protect them and their money. All investments are regulated to account for every penny of investors’ money – cryptocurrency should be no exception. These common-sense laws will bring greater transparency and scrutiny to the industry and strengthen our ability to crack down on lawbreakers”.
Deus Finance suffers huge losses after attack on its stablecoin
A few days ago, Deus Finance, a decentralised finance protocol (DeFi), lost over $6 million due to a security breach on its DEI (DEI) stablecoin. According to various sources, the hacker exploited a vulnerability in the BNB Smart Chain (BSC) on 5 May.
In fact, it appears that a bot initiated the hack on the BSC, causing a loss of over $1.3 million. Specifically, the hacker also targeted the Arbitrum network, with the ARB/ETH pair losing over $5 million.
Crypto community Twitter, of course, was not slow to voice its opinion, claiming that the main cause was the fact that the token contract had a fundamental implementation error, as we read:
Protocol later confirmed the attack, paused all contracts and burned the DEI tokens to prevent further damage.
Indeed, Deus stated on Twitter that it is trying to understand the actual backing of the DEI tokens, adding that a full recovery and refund plan will be created after a full analysis of balances and snapshots.
Source: https://en.cryptonomist.ch/2023/05/11/stablecoins-bail-payment/