Fiat-backed Stablecoins Could be Used to Post Bail in New York Under Proposed Bill

A new bill that would allow dollar-pegged stablecoins to be used as legal forms of payment for bail bonds has been submitted by a New York senator.  The political legislation lists the current methods of paying bail bonds, such as cash, insurance bonds, and credit cards, and attempts to add “fiat-collateralized stablecoins” to the list. It was submitted on May 10 by New York State Democrat Latrice Walker.

The measure aims to integrate the class of digital assets with fiat collateral in the state’s present criminal procedure law. It’s unclear which significant “fiat-collateralized stablecoins” would fall under this new definition and whether any stablecoins would be rejected by New York authorities.

Sam Bankman-Fried, the creator of FTX, was freed on tight home detention on December 22, 2022, after two guarantors secured $250 million in bond to Manhattan federal court on his behalf. His criminal trial is scheduled to begin on October 2.

The new legislation was introduced less than a week after Letticia James, the attorney general of New York, proposed new regulations on May 5 that would give the state more control over cryptocurrency exchanges.

The proposed bill would give New York regulators the authority to subpoena witnesses, impose civil penalties on cryptocurrency corporations that break the law, and close down businesses that are allegedly engaged in fraud or illegal activity.

James has been harshly criticizing cryptocurrencies lately, despite the fact that the launch of this measure indicates a willingness on the part of the New York state government to include stablecoins in its criminal procedure law.

Alex Mashinsky, the former CEO of Celsius, was the target of James’ complaint on January 5; more recently, on March 9, James sued the Seychelles-based cryptocurrency exchange Kuoin for selling securities and commodities without a license.