New York’s BitLicense is one of the strongest regulatory regimes in the country when it comes to the crypto world. Now, lawmakers are weighing another step that could change how residents engage with digital assets. 

Assemblymember Phil Steck has introduced Assembly Bill 8966, which would impose a 0.2% excise tax on the sale or transfer of crypto assets, including non-fungible tokens. This bill would take effect on September 1, 2025. While it may sound like a small percentage, the reaction has already been divided. Some are praising the tax as a way to generate funds for needed programs, while others warn that it could push crypto activity out of New York entirely.

According to the proposed bill, the funds collected would go to substance abuse prevention and intervention programs for schools in upstate New York. Steck argued that digital assets are now a thriving industry and can carry their weight in addressing social challenges. At the same time, many residents and crypto advocates worry that even a modest tax adds friction to a market where ease and speed are key selling points. 

For traders and regular users, even fractions of a percent can add up quickly, especially in high-volume transactions. Some have pointed out that individuals interested in maintaining privacy are already looking for the best ways to buy Bitcoin without verification. People can now use peer-to-peer exchanges and Bitcoin ATMs, which allow them to buy crypto without ID checks. These options usually come with higher fees, but critics of the bill think these methods could become even more attractive if new taxes go into effect.

Business leaders are concerned that New York could again be seen as a difficult place for crypto operations, driving activity to friendlier states. It has happened before. When the BitLicense was first introduced, several exchanges and startups closed their doors to New Yorkers rather than attempt compliance. A repeat of that situation could be damaging to the city’s reputation as a financial hub and to the everyday consumers who want to participate in a legitimate market. On the other hand, proponents argue that the bill is narrowly crafted and is not meant to choke off the industry but rather to apply a modest fee to help with a serious social problem that touches many families.

But just how effective would such a tax be in practice? Enforcement in crypto remains a challenge, since transactions can be routed through global exchanges and decentralized platforms that may not fall neatly under state authority. The Department of Taxation and Finance would need to establish rules to determine when a transfer is taxable and how to track it, a process that is anything but simple. Critics worry that this bill could add confusion, create loopholes, and raise little revenue, while discouraging crypto businesses from operating in the state. Still, lawmakers believe it’s worth the effort to send a message that the digital economy must do its part for social responsibility.

Many families have seen both the promise and the pitfalls of crypto. While it offers new ways to save, invest, and send money across borders, many have been left with deep losses because of scams, hacks, and market volatility. A tax that ties the industry’s growth to helping people could be framed as a moral trade-off: if digital coins are here to stay, why not let them play a role in strengthening communities? Whether voters embrace that argument may depend on how clearly the state can show that the money raised goes exactly where it is promised.

As the bill moves through the legislative process, crypto enthusiasts are expected to argue that the industry is still fragile and should be encouraged, not burdened. Supporters will stress the need for resources to help with social challenges. The outcome will reveal whether lawmakers believe the promise of revenue outweighs the risk of pushing another sector of the digital economy beyond state borders.