NY proposes bail measure that allows fiat-backed stablecoins

A New York lawmaker has introduced a measure that would legalize the use of dollar-pegged stablecoins as payment for bail bonds.

The measure, which was introduced on May 10 by New York State Democrat Latrice Walker, details the existing methods of paying bail bonds, such as cash, insurance bonds, and credit cards, and seeks to add “fiat-collateralized stablecoins” to the list.

The bill proposes to amend the state’s existing criminal procedure law to include the class of fiat-collateralized digital assets.

It is unclear which main “fiat-collateralized stablecoins” would fall under this new jurisdiction and which stablecoins New York officials would deem unacceptable.

On December 22, 2022, two guarantors posted $250 million in bail for FTX founder Sam Bankman-Fried at the federal court in Manhattan, allowing him to be released on rigorous home detention until his criminal trial on October 2.

The new measure was introduced less than a week after New York Attorney General Letticia James proposed new regulations on May 5 that would grant the state additional authority over cryptocurrency exchanges.

The proposed legislation would give New York officials the authority to issue subpoenas, impose civil penalties on crypto firms that violate state law, and shutter companies suspected of fraud or illegal activity.

While the introduction of this measure indicates a willingness on the part of the New York state government to accommodate stablecoins in its criminal procedure law, in recent months James has taken a hard stance against cryptocurrencies.

On January 5, James filed a lawsuit against former Celsius CEO Alex Mashinsky, and on March 9, James sued the Seychelles-based cryptocurrency exchange Kuoin for selling unregistered securities and commodities.