New York State Senate Banking Committee Chair James Sanders believes that the state should be at the forefront of emerging industries such as digital currency, cryptocurrency, and blockchain. He posed the questions: “Is it a good thing? Is it a bad thing? Should New York be pushing for it? Should we get to the head of this? Is this something that needs more regulations?”
The Queens Democrat has proposed legislation to form a taskforce of sixteen members, appointed by the Governor and the Legislature, to study the digital mining industries, including their impact on tax revenues, energy consumption, and environmental impact. According to Sanders, “This is not just going to be a report to gather dust somewhere. This is going to be our roadmap to the future. How do we move on this emerging industry in New York?”
Partner at the Financial Guys Mike Lomas supports less regulation, but believes that there should be greater oversight of cryptocurrencies not traded on public exchanges. He commented: “Some of these cryptocurrency doesn’t have a lot of volume, not a lot of liquidity. They’re also not real business models.”
When comparing the current industry to the dot-com boom of the 1990s, Lomas believes that the federal government is best equipped to regulate. He further stated that if the body is to do anything, it should be looking at banks investing in companies with little or no assets. He concluded, “I don’t want them investing in cryptocurrencies. I don’t want them investing in things that I have to worry about so it might jeopardize me being able to go to that bank and pull out my deposits.”
Sanders then noted that if the task force had been formed sooner, they may have been better able to predict issues such as the collapse of Signature Bank. He said that the study looks at both oversight and opportunities. “If this is what’s needed to make sure that New York is open for business, then we need to get ahead of it and understand it so we can move on it,” he said. Reports are due by December 2025.