Why Incoming NYC Mayor Eric Adams Wants to 'Go Big' on Crypto

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The question is, how big can he actually go?


Key points

  • New York's mayor-elect, Eric Adams, wants to get paid in Bitcoin and establish the city as a crypto hub.
  • New York has some of the strictest regulations in the U.S. which will make it difficult to pursue a crypto-friendly agenda.

New York's mayor-elect, Eric Adams, wants to make the Big Apple into a crypto hub. Adams won't take office until January, but he's already thrown his hat into the ring for the position of most crypto-friendly mayor.

Amongst other things, Adams wants to get paid in Bitcoin (BTC) and get cryptocurrency onto school curriculums. Read on to find out what he's proposing and whether he'll be able to deliver.

Eric Adams, New York, and cryptocurrency

Shortly after his Nov. 2 election, Adams tweeted: "In New York we always go big, so I'm going to take my first THREE paychecks in Bitcoin when I become mayor. NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries! Just wait!"

Adams has also spoken about the need for increased crypto education in school. He thinks it is important for young people to understand how Bitcoin and cryptocurrency work.

There's an element of one-upmanship here as Miami's Mayor Francis Suarez wants to be able to pay city employees in Bitcoin. Suarez has made several other moves to establish Miami as a crypto capital, and there are several cities vying for crypto-friendly status. These now include New York, Miami, San Francisco, Austin, and Denver.

In some ways, Miami is leading the way -- it already launched its own MiamiCoin which is estimated to have generated about $7.1 million in revenue for the city. The group behind the project, CityCoins, also launched a NewYorkCityCoin on Nov. 10 and there's talk of launching a coin in Austin soon.

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Becoming a crypto hub could mean attracting fast-growing blockchain companies, providing more jobs and investment opportunities. For Adams, it's also about positioning New York as the center of innovation. But it may not be as simple as pushing out a few crypto-friendly tweets.

Can Adams make good on his crypto promises?

Adams is going to have an uphill battle to make New York a truly crypto-friendly city. It currently has some of the strictest crypto regulations in the U.S. and it's the state government that sets a lot of those rules, not the mayor.

Plus, the New York Attorney General's office has embraced the role of crypto's bad cop with zeal. In March, Attorney General Letitia James told crypto platforms, "We're sending a clear message to the entire industry that you either play by the rules or we will shut you down."

Cryptocurrency exchanges need something called a "BitLicense" to operate in New York. So far, only an estimated 30 or so exchanges have worked their way through the regulatory red tape. Platforms need to comply with strict anti-money laundering rules, and can only sell a limited selection of tokens.

Now, many would argue that increased investor protection and stricter regulation is not a bad thing. But it complicates matters if you're trying to attract crypto business.

This brings us to another issue. New Yorkers can't actually mine the NewYorkCityCoin. To mine the coin, you need to own the Stacks (STX) token. But as a CoinTelegraph writer pointed out, none of the New York licensed exchanges can trade STX right now. Indeed, even outside New York, only a couple of major U.S. crypto exchanges trade STX, which means it would be hard for many Americans to buy the token.

For Adams, even getting paid in Bitcoin is not as simple as it seems. The mechanisms to pay state and municipal employees in crypto simply aren't there yet. He can (and probably will) convert his pay into Bitcoin as soon as he gets it, as few Americans can demand to receive a crypto salary right now. And, truth be told, they might not want to -- getting paid in crypto sounds cool, but the nuts and bolts may not even be legal. You'd certainly need to consult a tax advisor before opting to receive your pay in cryptocurrency.

Bottom line

The race is on for cities to establish their crypto-friendly credentials. After the economic woes of the pandemic, it isn't surprising that authorities want to attract new business and create jobs.

But, as with many things in the cryptocurrency industry, there's a risk of putting the cart before the horse. On the one hand, for crypto investors -- especially those in New York -- the more politicians advocating for crypto-friendly rules, the better.

On the other, if authorities are serious about attracting the crypto industry, there's a lot to take into account. From the environmental damage of Bitcoin mining to the need for investor protection and the potential impact of increased regulation, it needs to be part of a well-thought-out plan.

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