New York Proposes Cryptocurrency Tax for Substance Abuse Funding

New York’s Proposed Crypto Transaction Tax

New York lawmakers have introduced Assembly Bill 8966 proposing a 0.2% tax on cryptocurrency transactions, aiming for implementation on September 1, 2025, to benefit substance abuse programs.

The move could impact trading volumes in the state, potentially prompting shifts to lower-tax areas and affecting local digital asset liquidity.

Introduction of Assembly Bill 8966

New York lawmakers are considering a new tax measure under Assembly Bill 8966, aiming to impose a 0.2% excise tax on cryptocurrency and NFT transactions, beginning September 1, 2025. This proposal is led by Assemblymember Phil Steck.

Funding for Substance Abuse Prevention Programs

Phil Steck, a member of the New York State Assembly, introduced Assembly Bill 8966, which proposes a 0.2% tax on crypto transactions to fund substance abuse prevention in schools. As Steck himself said, “Expanding substance abuse programs is essential to support the health and well-being of students in New York.” The bill was submitted on August 13, 2025.

Impact on Trading Volumes and Market Reactions

If implemented, this bill could affect trading volumes in New York, potentially encouraging traders to relocate activities. It mandates the tax on all digital assets, such as BTC, ETH, stablecoins, and NFTs, without exceptions. Proceeds from the tax will finance programs aimed at supporting students’ health and well-being. This measure could alter the liquidity landscape as both individuals and businesses adapt to higher transaction costs in New York.

Historical Context and Potential Industry Impact

Past decisions, like the BitLicense in 2015, caused issues for blockchain firms, and similar consequences may arise now. The state previously witnessed firms exiting due to high compliance costs and regulatory hurdles. Possible market reactions include reduced trading and liquidity outflows as industry participants may seek lower-tax jurisdictions. Historical trends suggest potential regulatory burden and increased compliance costs for blockchain-based businesses operating within the state.