Governments are known to be, understandably, cold toward the adoption of Bitcoin. But in spite of this opposition, New York City Councilman Mark Levine has introduced a bill asking for Bitcoin to be accepted as a means of fine and fee payments in the city.
Concerns about illegal use of Bitcoin have made governments to be wary of its adoption. The cryptocurrency was the preferred means of payment on the infamous online black market Silk Road and other similar platforms. It has also become a favorite of sort for money launderers. The anonymous nature of Bitcoin is a vital factor that has made this digital currency perfect for illegal usage.
However, Bitcoin has several other benefits that many people fail to pay enough attention to in many cases. Levine is proposing the use of Bitcoin for some New York City payments based on one or two of these benefits.
Saving with Bitcoin
One very appealing thing about Bitcoin transactions is the fact that fees are usually very low. These rarely exceed one percent of a transaction’s value. The money saved on fees can be quite significant when large amounts are involved. It is this reality that fuels Levine’s conviction that the cryptocurrency will work just right for New York City and help it save millions in fees.
In an interview with CoinDesk, Levine expressed concerns over the significant amount of revenue from fees and fines that are lost in credit card fees. He was of the opinion that adoption of Bitcoin by the city for these payments would help in saving millions of dollars yearly.
Attracting tech startups
Councilman Levine is not rooting for the adoption of Bitcoin for payment just to be able to make savings. He hoped that the adoption could also help set New York City apart from rival areas such as Silicon Valley and Boston, helping it to attract more tech startups to itself.
New York is known to be somewhat Bitcoin friendly compared to some other places in the country. It plays host to the world’s first physical Bitcoin center, Bitcoin Center NYC, which started operation early 2014. The state is also working on introducing US’ first state-specific regulation for Bitcoin, BitLicense, which will help protect consumers and very likely boost usage of cryptocurrencies. The license will require Bitcoin operators to have a database of customers and reserve equivalent to customer assets.
Reservations about Bitcoin adoption
Some of Levine’s colleagues have not been as enthusiastic about the Bitcoin adoption bill. The chief concern seems to be volatile nature of the cryptocurrency. The councilman said the reactions bordered on the idea “that bitcoin is the ‘Wild West’ of currencies” – a reasoning he countered.
Another problem that stands in the way of Bitcoin adoption in New York City is the fact that the cryptocurrency is not legal tender in the state. However, Levine believes that this barrier can be sidestepped by having a financial intermediary to accept Bitcoin and exchange it into cash for the city.
Levine is optimistic that the bill could be passed by the city council as early as June. If that managed to happen, it could prove quite vital in making consumers more receptive to Bitcoin.