New York lawmakers consider groundbreaking legislation that would allow state taxes to be paid with cryptocurrency, marking a shift in the state’s traditionally restrictive stance toward digital assets.
At a Glance
- Assembly Bill A7788 proposes allowing state agencies to accept Bitcoin, Ethereum, Litecoin, and Bitcoin Cash for state payments
- Sponsored by Assemblymember Clyde Vanel, the bill would amend State Finance Law by adding Section 4-b
- Payments would only be considered settled after conversion to fiat currency, protecting the state from volatility risks
- State agencies could charge service fees to offset transaction costs associated with cryptocurrency payments
- The bill is optional for agencies, not mandating acceptance of digital currencies
Proposed Legislation Details
Assembly Bill A7788, filed on April 10, 2025, for the 2025-2026 Legislative Session, proposes giving New York state agencies the authority to accept cryptocurrencies as payment for taxes, fines, fees, and other state obligations. The bill, currently in the Assembly Governmental Operations Committee, specifically names Bitcoin, Ethereum, Litecoin, and Bitcoin Cash among the acceptable digital currencies. If passed, the law would take effect 90 days after approval, representing a significant shift in how New Yorkers interact with state government.
The legislation, sponsored by Assemblymember Clyde Vanel, carefully structures the implementation to protect the state’s financial interests. State agencies would be authorized to enter agreements with cryptocurrency issuers or payment providers to define payment processing and acceptance conditions. Importantly, the bill specifies that financial obligations are not considered settled until the state receives full payment in traditional currency, effectively shielding the government from cryptocurrency market volatility.
Optional Implementation Approach
Unlike some more aggressive crypto adoption proposals, this bill takes a measured approach by making cryptocurrency acceptance optional rather than mandatory for state agencies. This allows departments to evaluate whether digital asset acceptance aligns with their operational capabilities and constituent needs. The flexibility acknowledges the varying technical capabilities and public service requirements across different government entities while still opening the door for modernized payment options.
“Each state agency is authorized to enter into agreements with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payments of fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts including penalties, special assessments and interest, owed to state agencies,” the bill stated.
The legislation also addresses practical implementation concerns, permitting agencies to charge service fees to offset transaction costs associated with cryptocurrency payments. This provision ensures that the adoption of digital currency options would not create an additional financial burden on state operations or taxpayers who continue to use traditional payment methods. The bill further specifies that necessary regulations will be established by the effective date, providing a framework for consistent implementation.
— DeFi Cheetah – e/acc (@DeFi_Cheetah) April 9, 2025
Contrasting Views on Cryptocurrency Adoption
This proposal highlights the divided stance among New York officials regarding cryptocurrency regulation and adoption. While Assemblymember Vanel’s bill represents a pro-innovation approach, other state leaders maintain a more cautious position. Attorney General Letitia James has advocated for stronger federal regulations on the crypto industry, emphasizing the need to protect traditional financial systems and prevent potential illegal activities through enhanced oversight.
“A strong dollar is in America’s national interest. It means there is demand for and confidence in US institutions and the US economy. America should defend the prime position of the US dollar for global transactions—a position that Bitcoin, which can instantly transfer value globally, threatens,” James stated.
This bill’s introduction follows previous unsuccessful attempts to pass similar legislation in New York, a state known for its stringent cryptocurrency regulations. The proposal represents a potential turning point in the state’s approach to digital assets, possibly signaling a more open stance toward embracing financial innovation while maintaining appropriate safeguards. Should the bill advance through the legislative process, it could position New York as a leader in government adoption of cryptocurrency payment options.
