New York lawmakers propose statewide cryptocurrency

Lawmakers in New York have proposed a statewide cryptocurrency and blockchain-based banking platform to encourage the recirculation of money in low-income communities.

The project – pitched as a “public Venmo” – was proposed by New York state assembly member Ron Kim, senator Julia Salazar, and Cornell law professor Robert Hockett.

Should the proposal be accepted, it would mark the USA’s first publicly-owned electronic banking platform alongside a digital currency that could be exchanged for various goods and services in the state.

The project aims to compensate residents for work that is either unpaid or underpaid. This could encompass babysitting children or caring for senior citizens.

Inclusive Value Ledger

The digital currency would run on top of the project’s “Inclusive Value Ledger” (IVL). The team has called for New York State to distribute $55 billion per year that is uncollected in individual tax credits through the “public Venmo”.

The IVL is an administered, non-extractive payment system which would enable recipients to spend freely within the New York economy without transaction fees or delays.

In effect, every business and individual in the state would be given a virtual wallet that is connected to a state government-controlled master wallet.

This would then serve as an alternative to a bank account minus the fees a bank would take for profit, reports Vice.

Kim, Salazar, and Hockett argue that unlike Facebook’s Libra, the IVL statewide cryptocurrency would encourage the recirculation of money in low-income communities since it is a complementary currency to the US dollar.

This would mean it operates on a hyper-local scale and keeps money rooted in one particular area, supporting local economic growth.

Hockett writes in the whitepaper for the IVL that the peer-to-peer payment technology needed to underpin a project such as this already exists.

The proposal emphasises that the payment system will be secure, but it does not provide details on how security will be carried out or how the project aims to meet the privacy needs of those it hopes to serve.

Interested in reading more New York-related stories? Discover more about a financial regulator in the state hoping to give freedom to cryptocurrency exchanges.