New York State has proposed new laws that will authorize fiat-collateralized stablecoins as a way of bail fee.
The invoice, generally known as New York Meeting Invoice 7024, introduced on Might 10, would add stablecoins to the listing of accredited strategies of paying bail bonds, becoming a member of money, insurance coverage, and bank cards.
Whereas the invoice didn’t specify which stablecoins could be allowed, its acceptance might provide a lifeline to the floundering stablecoin market.
New York’s strict crypto rules
This invoice follows New York Legal professional Normal Letitia James’ current crackdown on the crypto trade, which includes the Crypto Regulation, Safety, Transparency, and Oversight (CRPTO) Act.
The CRPTO Act intends to tighten rules, introduce public audits of cryptocurrency exchanges, and forestall people from proudly owning the identical corporations to keep away from conflicts of curiosity. It will additionally prohibit lending and borrowing crypto belongings and prohibit exchange-issued tokens below the battle of curiosity clause.
Regardless of James’ measures towards crypto corporations, the transfer to simply accept stablecoins for bail bonds is a optimistic step for New York State.
Stablecoin market in decline
The stablecoin market has declined over the previous yr, with a capitalization of roughly $131 billion, representing solely 11% of the entire crypto market.
Tether stays on the high of the stablecoin market, with a 62% market share and $82 billion in circulation. Whereas Tether’s provide has steadily elevated this yr, its rivals have been shrinking.
Because the begin of 2023, Tether’s supply has surged by 24%, cementing its place because the dominant participant available in the market.
In the meantime, Circle’s market share has been declining, with its USDC stablecoin accounting for under 23% of the market and a circulation of $30 billion. Binance USD (BUSD) has additionally been struggling to maintain tempo following regulatory scrutiny of its issuer Paxos, accounting for simply 4.3% of the stablecoin market and a provide of $5.7 billion.