Colorado, New Jersey, and the New York Stock Exchange Add Legitimacy to Cryptocurrencies

While cryptocurrencies are still considered new and a somewhat fringe topic, the general consensus is that they are here to stay, in one form or another. Legislators have long struggled with how to classify and regulate crypto, and financial experts often express alarm at the lack of governmental oversight.

However, the crypto ads that ran during Super Bowl LVI gave a spotlight to cryptocurrencies and piqued interest with many previously uninterested Americans. Coinbase alone reportedly paid $14 million for their Super Bowl ad and, according to CPO Surojit Chatterjee, their landing page received 20 million hits in one minute.

The increase in traffic was large enough that Coinbase’s app crashed. On top of that exposure, recent moves by legislators from Colorado and New Jersey, and even the New York Stock Exchange, add legitimacy to cryptocurrency. While the Super Bowl allowed crypto to enter mainstream consciousness, the actions by legislators and financial institutions may be indicators of the future of crypto. Namely:

• The New York Stock Exchange has filed an application on February 10 with the U.S. Patent and Trademark Office to register the term “NYSE” for a marketplace for NFTs (non-fungible tokens) and digital currency.

A New York Stock Exchange spokesperson has said that they have no immediate plans to launch a crypto-trading marketplace and that the stock exchange “. . . regularly considers new products and their impact on our trademarks and protects our intellectual property rights accordingly.”

Yet, even the indication that the largest global stock exchange is considering setting up a marketplace for digital currencies and NFTs adds credibility to the predictions that blockchain technology will have a much bigger impact in the future.

• The State of Colorado is taking more concrete steps. Colorado Governor Jared Polis joined CoinDesk TV for an interview on February 16. He outlined plans for Colorado to start accepting payments in cryptocurrency for taxes and other state-related transactions by the end of summer. He stated:

“. . . [A]nother relatively new announcement is we will be accepting crypto for paying state taxes and other transactions with the state by the end of summer, so we’re really excited to move that along.”

The Colorado budget will still be in dollars and the state has no intention of holding cryptocurrencies, but they will be partnering with crypto companies to accept and convert cryptocurrencies as a transactional intermediary. Gov. Polis compared paying with crypto to paying by credit card.

He further expanded that there are plans to leverage blockchain technology in other layers of government, touching upon using blockchain for elections (the 2020 Denver municipal elections already utilized blockchain for overseas ballots), incentives for transitioning to renewable energy, and digital citizenship.

The State of New Jersey may be going down a similar route to Colorado. NJ Rep. Josh Gottheimer has introduced an early draft of a new bill (the Stablecoin Innovation and Protection Act of 2022) on February 14 that would regulate dollar-backed stablecoins (a stablecoin is a cryptocurrency that is pegged to fiat money or an exchange-traded commodity).

The proposed act would define “qualified stablecoin” as cryptocurrency that is redeemable for US dollars on a one-to-one basis. The stablecoins that can be designated as “qualified” would be regulated by the legislation as would be which institutions could issue qualified stablecoins.

It is true that the Stablecoin Innovation and Protection Act of 2022 is still an early draft, that Colorado is still not accepting payments in crypto, and that the NYSE has only applied for a trademark. Yet, it is clearly demonstrable that cryptocurrency is no longer a fringed topic but is quickly becoming mainstream, with all the regulation and oversight that switch entails.