New York’s lawmakers are pushing for its own cryptocurrency

Lawmakers in the city of New York are proposing a new form of hyper-localized digital cash that would run on a peer-to-peer payments platform called an “Inclusive Value Ledger.”

The proposition comes from New York State Assembly member Ron Kim, Senator Julia Salazar, and Cornell law professor Robert Hockett, who, in true crypto form, published a whitepaper to elaborate on the idea in November 2019.

The whitepaper comes with crypto’s common claims of “cutting out the middleman” (and crypto’s vague gestures as to whom these middlemen might be—surely not the state itself!), but this isn’t a truly decentralized cryptocurrency as we know it.

Yes, the payments are peer-to-peer—and feeless, no less—but instead of a truly distributed ledger, the ledger would be maintained by a “New York Master Account Administrator,” and a “Master Account,” which “can take the form either of the public fisc of the governmental unit in question or of a legal trust settled and administered by that unit.”

The paper’s authors call it a “Public Venmo;” a way for the citizens of the state to get on to the digital economy of the internet. But unlike Venmo, it wouldn’t charge fees for instant bank transfers or credit card systems. 

“I believe that our proposal, the Inclusive Value Ledger, has the potential to be truly revolutionary,” said Kim in a public statement published in October. “The creation of a free public savings and payment platform that all New Yorkers can use, not only to pay for goods and services but also to transfer money directly to each other through, could fundamentally reshape New York into a fairer, healthier, wealthier, and more inclusive place for all.” 

Lawmakers also said that the $55.7 billion the state gives out in tax, remittance credits, and other government benefits, would be distributed using the digital debit-credit ledger system. 

“We need to address the inequities that are built into our current economy and transition to an inclusive system that empowers all people to participate,” said Salazar.

Hockett added, “All valuable work and all valuable products and services, including presently unpaid care work and environmental cleanup, will be instantly compensable; and all that is earned will be instantly savable and spendable.”

A growing appetite for digital money

The bill couldn’t come at a more opportunistic time. While the idea of building state-run digital currencies have been scorned in the West, particularly in the US—things are starting to shift. 

In October, China President Xi Jinping spoke about the promise of blockchain technology just days after Facebook CEO Mark Zuckerberg—defending the upcoming Libra cryptocurrency—told Congress the US needed to innovate to keep its monetary dominance in the world. China is also about to launch its own digital Yuan, while several other private companies have recently launched cryptocurrencies in Asia. 

As a result, the European Central Bank and countries in the West—including Sweden, Wales, Estonia and France—have started looking into creating their own digital currencies. While the US has proved very resistant to the idea, global pressure might just make it change its mind. And if it does, this bill will be ready and waiting.