BILL NUMBER: S5044

SPONSOR: PARKER
 
TITLE OF BILL:

An act to establish the digital currency task force

 
PURPOSE OR GENERAL IDEA OF BILL:

Establishes a commission to study how to regulate cryptocurrencies in
New York State

 
SUMMARY OF PROVISIONS:

Section 1 authorizes the department of financial services to establish a
New York State digital currency task force.

Section 2 states who the task force shall be comprised of.

Section 3 lists the responsibilities and roles of the taskforce.

              

Section 4 explains who the taskforce will work and collaborate with.

Section 5 addresses when the taskforce must submit their final report.

 
JUSTIFICATION:

It is arguable that New York remains as the global financial capital
center. We must make sure that we help foster an environment to lead the
world in the finance sector. Today, the New York Stock Exchange and
NASDAQ are two of the most valuable stock exchanges in the world.  In
New York State, the financial sector makes up over eighteen percent of
our tax revenue and is the state's premiere economic engine.  We, howev-
er, are not guaranteed to remain the world financial leader.  In fact in
this economic environment, we are competing for financial investments
and our standing the fiscal leader with London, Japan, Shanghai and Hong
Kong. In this digital and technological environment, however, New York
is competing with virtually every global market and cur states for
future financial transactions and activities. California, Nevada and
Delaware are gaining penetration for cryptocurrency investments and
transactions.

Cryptocurrencies are making their way into the New York state digital
economy. A growing number of merchants accept cryptocurrency as payment
including Microsoft, Expedia.com, Dell, Overstock.com, Reddit, Subway
and Bloomberg.com. Companies and investors are raising. capital and
funding through Initial Coin Offerings (IC0).  Additionally, there are
cryptocurrency ATMs across the state where New Yorkers are purchasing
denominations of cryptocurrencies at conveniences st ores and public
places.  According to Wikipedia, "a cryptocurrency is a digital asset
designed to work as a medium of exchange using cryptography to secure
the transactions and to control the creation of additional units of the
currency... Bitcoin, created in 2009, was the first decentralized cryp-
tocurrency." The virtue and danger of cryptocurrency is its anonymity
and decentralized model. As a state we must protect anti-money launder-
ing, know-your-customer laws and consumer and investor protections.

In 2015, The New York State Department of Financial Services (DFS)
promulgated the Bitlicense, which is a business license for virtual
currency activities in New York State. The regulations are limited to
New York State activities. Since 2015, DFS has awarded 5 Bitlicenses.
In order to supplement the Bitlicense with the proper legislative frame-
work, we must fully understand the implications of blockchain technolo-
gy, its impact on innovation, competition and regulation. New York must
be a state where: (1) consumers and investors are protected, (2) we
prevent money laundering and (3) we know the customer to protect from
nefarious uses and actors. At the same time, New York must lead the
world in legitimate digital and cryptocurrency investments and trans-
actions.

 
PRIOR LEGISLATIVE HISTORY:

2019-20: S4593 - Referred to Internet and Technology

2017-18: S7724 - Referred to Banks

 
EFFECTIVE DATE:
Effective immediately.