When Eric Adams, New York’s next mayor, triumphantly attended a political conference in Puerto Rico last month, he told reporters he paid for his trip there. “I paid myself. I’ve learned that the best way to tell people to go about their business is to pull out your pocket and write your own check, so I’m here on my time, ”Adams said at the SOMOS conference, organized by a non-profit organization for the benefit of the Latino community. “It’s on my dollar, my penny, and my time.” Adams left out that he had not traveled on a commercial airliner. Instead, he flew on a private jet owned by Brock Pierce, a former child actor who is now a wealthy cryptocurrency entrepreneur. The Adams campaign said Adams paid for the theft, but declined to provide proof.
The news that Adams, a big business booster, was traveling on a jet owned by a cryptocurrency heavyweight came as no surprise to those paying attention. Adams, a Democrat, has previously said he will take his first three Bitcoin paychecks and called for cryptocurrency to be taught in schools. Alongside Miami Mayor Francis Suarez, Adams has become a prominent champion of an infant industry inundated with money and under renewed scrutiny by regulators. “When you hear Eric Adams talk about cryptocurrency, what he’s talking about is trying to convey an enthusiasm for emerging technologies, seeing New York as a home, and encouraging investors and technologists to understand. that they have a partner with the city, ”says Andrew Rasiej, a senior member of Adams’ transition team that focuses on technology. “A lot of people talk about having a deputy mayor for technology. The good news is, we already have a tech mayor.
Adams, the Brooklyn Borough President and former police captain, is one of the most intriguing and unpredictable future mayors of modern times. He narrowly won an overcrowded Democratic primary with working class support in the Outer Borough of New York City. At the same time, he shamelessly courted the real estate and Wall Street elites, receiving large campaign donations from some of the richest and most powerful men in the world. Rupert Murdoch, Michael Bloomberg, and Bill de Blasio all see themselves as enthusiastic Adams supporters. De Blasio forged a close alliance with the city’s biggest real estate developers, but kept a cool distance from power brokers in the worlds of tech and finance. Adams, a regular at Tony Manhattan’s nightclubs, has indicated he would be much more accommodating. Unlike de Blasio, Adams openly chose to fight with the Democratic Party’s left flank.
The cryptocurrency corresponds to this Adams mark. The best-known and most valuable currency, Bitcoin, is barely over ten years old and has risen in value since the start of 2020. A Bitcoin is now worth tens of thousands of US dollars. Once devoid of significant value, Bitcoin has made a number of traders and investors extremely wealthy in a short period of time. The price of the coin and other digital currencies, like Ethereum, is incredibly volatile; it is not uncommon for digital coins to gain and lose value rapidly over the course of a day. (Disclosure: I own small amounts of cryptocurrency.) Unlike a regular bank transaction, cryptocurrency transactions are incredibly difficult to follow. There is no central bank or single administrator. The currency is sent individually over a peer-to-peer network, and transactions are verified digitally in a ledger called a blockchain. Anonymity can breed illegality, with international crime cartels turning to Bitcoin to launder money.
Some crypto enthusiasts advocate coins as a way to build a radical libertarian future beyond the reach of banking regulators, but more investors are now talking about the potential of digital currencies for use in ordinary transactions, like dollars on a debit card. . Other boosters see cryptocurrency as a worthy investment vehicle, like digital gold, and a hedge against rising inflation. Major financial firms have dramatically increased their crypto investments over the past two years, since the price of Bitcoin rose at the start of the pandemic. “The analogy would be with a credit card payment system. You would have a Bitcoin payment system, ”says Joseph Trevisani, senior currency and economics analyst at FXStreet. “Does it involve infrastructure, jobs, businesses operating here and links to the rest of the financial world? Would that create jobs here? Without question.”
Ultimately, cryptocurrency remains a speculative vehicle. Coins are data held in a secure online ledger and do not exist in any physical form, unlike paper money. They gain value based on the investment and belief. Currencies have intrinsic value because people with billions of dollars believe they have it. New York City itself is home to a number of companies that trade cryptocurrencies, but it is the poorer areas of the upstate where Bitcoin operations have started to take over. The act of mining or creating Bitcoin – a very complex computer process that creates a crypto system that generates new Bitcoin and facilitates transactions – is incredibly energy intensive. Thousands of energy-hungry servers are needed; To meet its carbon reduction targets, China has banned the practice, sending several miners to New York and other states. The former industrial centers of upstate and western New York state have become attractive to Bitcoin miners as electricity and land are cheap, even as environmental groups speak out against the ‘activity and demand that this practice be banned.
Given the lack of space and huge energy costs, the five boroughs are unlikely to be a hub for Bitcoin mining anytime soon. In fact, Adams himself can do relatively little, as mayor of New York City, to directly develop the cryptocurrency industry. The state government, not the municipality, regulates most financial activities. New York State is one of the strictest cryptocurrency regulators in America, requiring companies that participate in the industry to obtain a so-called Bitlicense from the State Department of Financial Services. Similar to banking licenses, Bitlicenses require financial disclosure and anti-money laundering and cybersecurity compliance, among other stipulations. About 30 companies have obtained a license or charter since the rules were introduced in 2015.
It is not at all clear what policy changes Adams will be looking for on the cryptocurrency front. His spokesperson did not respond to a request for comment, and he declined to elaborate further on his plans. City workers must accept payments in U.S. dollars, not cryptocurrency, and it would be an extremely difficult business to overhaul a payment processing system for hundreds of thousands of employees. Getting more private businesses to accept cryptocurrency might be another goal, but few are likely to ditch credit and debit cards carrying US dollars for fluctuating digital currency. “The mayor can work to change the laws to get the city to accept payments for certain crypto transactions. That they can do it without state approval, ”says John Kaehny, executive director of Reinvent Albany, a good government group. “There is an opportunity cost to everything the government does. You’ve got smart people with limited time and you’re thinking about how to set up the city business so they can use crypto… that’s stupid.
Another question, also unresolved, is whether Adams himself owns Bitcoin or any other cryptocurrency. His campaign refused to respond to a Voice investigation, and he has not publicly indicated whether he has bought or traded cryptocurrency. As mayor of New York, he could have a direct influence on the price of Bitcoin if it becomes a frequent enough booster. Billionaire Elon Musk has moved the cryptocurrency markets only through tweets. Adams might decide, like Suarez in Miami, to create the New York piece of his own. In November, the mayor of Miami announced that he would convert the millions of dollars in product MiamiCoin has created into a Bitcoin “dividend”, potentially sending money into newly created digital wallets to city residents. Investing in pension funds is an area of interest for crypto enthusiasts and a potential area of both risk and reward for city workers. Adams can’t directly decide how the city’s pension funds invest, but he could use his bully chair to influence decisions unions make. New Jersey’s Common Pension Fund D has small stakes in blockchain and digital holding companies, while two pension plans in Fairfax, Va., Have invested in crypto assets.
The incoming mayor’s adoption of cryptocurrency is seen, at the bare minimum, as a symbolic gesture. De Blasio was never as anti-tech as his reputation suggested – he once teamed up with Andrew Cuomo to land the taxpayer-subsidized Amazon headquarters in Queens – but he was never going to be overtly friendly or inviting millionaires and billionaires looking for a certain amount of ego accommodation and gratification. Tech companies continued to thrive in New York City under de Blasio: Facebook agreed last year to lease almost all of the space in the James A. Farley Building in Midtown. Supporters in the cryptocurrency industry are hoping, in the long term, that Adams could seek to boost businesses with tax breaks comparable to those Amazon would have received had their headquarters been located in the city. But popular backlash has been fierce, especially since Amazon is a trillion dollar company that doesn’t need government largesse. It was also never clear that Amazon could meet its ambitious employment goals. And the nascent crypto industry is not yet a solid employer.
Business in the five boroughs is likely to continue at a brisk pace, no matter what Adams does. And for a city that still struggles to recoup tourist dollars lost during the pandemic and tackle a myriad of other challenges – homelessness, gun violence, unemployment – it’s unclear how much New York really matters. becomes the cryptocurrency capital of the United States. “If you look at New York’s employment problems, it’s how to employ large numbers of semi-skilled and unskilled people and tackle income inequality,” says Kaehny. “Crypto is such a non-response.” ??