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New York Embraces Marijuana Over Cryptocurrencies

CryptocurrencyApr 01, 2021 06:30AM ET
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New York Embraces Marijuana Over Cryptocurrencies

  • The state of New York has chosen investments in marijuana over cryptocurrencies.
  • In a shocking development, New York State Attorney General Letitia James has put out a statement referring to cryptocurrency investments as not “being prudent.”
  • In contrast, the top dogs of the New York State government have passed a bill that will legalize marijuana in the state.
  • New York is widely referred to as the financial capital of the world, playing host to Wall Street and a large number of fintech firms with market capitalization running into trillions of dollars.

The recent antics of the government of New York indicate their distrust of the emerging cryptocurrency and blockchain-based businesses.

This assertion is based on the statement put out by the Attorney General of New York, Letitia James, warning potential investors in digital currency about the extreme risks associated with cryptocurrencies.

On the other hand, the state has shown support for legalizing marijuana, with all top echelon government officials agreeing with the plan. The legalization of marijuana by the state of New York will have far-reaching effects for the state and its citizens.

New York’s Lack Of Trust In Cryptocurrencies

New York, the financial capital of the world and home to many multinational investment banks and financial technology firms, seems to be turning its back on cryptocurrency investments.

A recent strongly worded memo by the Attorney General, Letitia James, referred to investments in cryptocurrencies as not “being prudent.”

The growth of cryptocurrencies at the turn of the year triggered massive institutional interest, with several Wall Street firms like JP Morgan, BNY Mellon (NYSE:BK), and Morgan Stanley (NYSE:MS) scrambling to provide cryptocurrency-based services to their clientele.

In light of this frenzy, the Office of The Attorney General issued a memo indicating the risks of undervaluation, market manipulation, and difficulty in liquidating the huge investments that are associated with cryptocurrencies.

Asides from the warnings sounded to investors, James also took the liberty to admonish the key players in the industry on the need to comply with the legislation, “or we will shut you down.”

On the Flipside

  • Retail investors are jostling with Wall Street firms over the scramble for Bitcoin, according to JP Morgan.
  • In Q1, retail investors purchased 187,000 Bitcoin, which exceeds the 173,000 purchased by institutional investors.
  • To get the data, JPMorgan (NYSE:JPM) tracked Bitcoin futures, fund flows, and company announcements.

New York Opens Its Arms To Marijuana Investment

The Empire State recently voted to legalize recreational marijuana, making it the latest US state to make the psychotropic substance legal. The new law will be retrospective, causing an automatic resentencing of anyone previously convicted in marijuana-related cases.

The law seems to have the full support of the highest echelon of the New York government, with Governor Andrew Cuomo, majority leader Andrea Stewart-Cousins, and Carl Heastie, the speaker of the State Assembly, all on the same page concerning the legislation.

The law will create a tax liability generated on the sale of marijuana of up to $350 million annually for the state of New York, with legislators deliberating on a 13% sales tax.

Furthermore, an Office of Cannabis Management will be created to regulate the sale of marijuana, with a five-member board steering the wheel of the office.

The governor believes that “legalizing adult-use of cannabis isn’t just about creating a new economy; it is also about “justice for long marginalized communities.”

The decision of the state of New York to wholeheartedly embrace the legalization of marijuana at the expense of strict regulation for cryptocurrency will most certainly leave crypto enthusiasts grumbling over the stance of the government.

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New York Embraces Marijuana Over Cryptocurrencies

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