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Editorial: State needs e-currency task force

Editorial: State needs e-currency task force

Financial markets moving toward technology; New York lagging behind regulations, protections, security
Editorial: State needs e-currency task force
Photographer: Shutterstock

If a problem is too big, too complex or too political to be solved immediately, government officials often placate the masses by creating a task force.

A lot of these task forces end up being a waste of time and money, their bloated reports going unread and their recommendations ignored.

But there’s at least one task force the state needs to establish — in fact, it should have established it years ago — that could affect New York’s role in the national and international financial markets for the foreseeable future.

New York has long been a world center for the financial industry. New York’s financial industry serves as a major economic engine and generates more than 18 percent of the state’s tax revenue.

But that dominance is threatened by places like London, Hong Kong, Japan, California and Delaware.

The use of cryptocurrency in investments and financial transactions is growing in volume and importance, and New York needs to understand, exploit and regulate this technology. Otherwise, companies that use and increasingly rely on it will take their business elsewhere.

To that end, the state Senate passed a bill in June (A8783/S9013) that would create a digital currency task force to provide the governor and lawmakers with information about the implementation of digital currencies on financial markets in the state.

Regulations and consumer protections are needed to ensure the safety and security of electronic transactions and assure the public their money and proprietary information is protected.

The nine-member task force would conduct a review of all digital currency, cryptocurrency and blockchain industries in the state; examine the tax and economic benefits; examine the laws and regulations used by other government entities; and make recommendations on consumer protections, transparency and security.

It also would examine blockchain technology. Blockchain technology allows corporations or individuals to send and receive encrypted material such as stock certificates, cryptocurrency, contracts and other proprietary information in a reliable, highly secure manner that can’t be altered or copied by any of the parties. That’s what makes it so vital to the future of the financial industry, and it’s why New York needs to get out in front of this whole technology.

California lawmakers passed legislation just last week to define, study and regulate the growing financial technologies and is further along than New York in installing regulations and protections.

The New York task force would be expected to deliver a report to the governor and Legislature by mid-December 2020.

This is one task force that can’t be established quickly enough and one whose work can’t be completed soon enough.

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