New York City has followed suit with Philadelphia, Washington, D.C., as well as the entire state of New Jersey with their rejection of so called no-chain businesses. Chicago recently attempted a cashless store ban as well, but the bill failed to pass.
In a mostly Democratic lead effort, the legislative councils of these cities often cite unbanked and underbanked citizens as the primary reason that these mechanisms should not be relied upon. This is exceptional given that banking the unbanked is, arguably, one of the core principles of blockchain. The idea that a bank can simply not accept a customer because of a limited or no banking history, especially for young people is outdated at best and racist at worst since 22% American households are considered unbanked or underbanked in the United States, most of which are either Black or Hispanic, according to the FDIC (2018). Most of the banked and underbanked in the United States cannot obtain traditional credit cards due to lack of income or credit.
These simple facts mean that because of the nature of blockchain, customer laws should allow for new FinTech solutions or banks using blockchain to provide greater access to having a bank account, particularly to those who have been marginalized by the traditional banking system. Meanwhile, in Mexico, approximately 60% of people are underbanked and they are using digital financing solutions already, such as Stori, because as a society, there are enough people with access to internet and mobile devices that this is the best solution.
We sadly aren’t there yet as a blockchain industry, even though CashApp by Square and created by Jack Dorsey of Twitter is making tremendous strides in banking the unbanked. CashApp now even allows for its own debit card without a bank account. It is my firm belief that within the next five years these cashless ban laws will be repealed. With solutions like Celsius and Aeryus and others rapidly attempting to resolve this problem stablecoins, businesses, and the underbanked will no longer have this problem in the near future. In the meantime, if you’re a business in New York City, don’t fall victim to this legislation when it presumably takes effect in a couple months.