New York State has proposed new legislation that would authorize fiat-collateralized stablecoins as a means of bail payment.
The bill, known as New York Assembly Bill 7024, introduced on May 10, would add stablecoins to the list of approved methods of paying bail bonds, joining cash, insurance, and credit cards.
While the bill did not specify which stablecoins would be allowed, its acceptance could offer a lifeline to the floundering stablecoin market.
New York’s strict crypto regulations
This bill follows New York Attorney General Letitia James’ recent crackdown on the crypto industry, which involves the Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act.
The CRPTO Act intends to tighten regulations, introduce public audits of cryptocurrency exchanges, and prevent individuals from owning the same companies to avoid conflicts of interest. It would also prohibit lending and borrowing crypto assets and restrict exchange-issued tokens under the conflict of interest clause.
Despite James’ measures against crypto companies, the move to accept stablecoins for bail bonds is a positive step for New York State.
Stablecoin market in decline
The stablecoin market has declined over the past year, with a capitalization of roughly $131 billion, representing only 11% of the total crypto market.
Tether remains at the top of the stablecoin market, with a 62% market share and $82 billion in circulation. While Tether’s supply has steadily increased this year, its competitors have been shrinking.
Since the start of 2023, Tether’s supply has surged by 24%, cementing its position as the dominant player in the market.
Meanwhile, Circle’s market share has been declining, with its USDC stablecoin accounting for only 23% of the market and a circulation of $30 billion. Binance USD (BUSD) has also been struggling to keep pace following regulatory scrutiny of its issuer Paxos, accounting for just 4.3% of the stablecoin market and a supply of $5.7 billion.