Eric Adams — Let’s get your salary paid in Bitcoin!
While New York’s next mayor has promised to be an ally for Bitcoin, the city is currently one of the most unfriendly places for cryptocurrency.
Dear Mayor Adams,
I would like to begin by congratulating you on your election as mayor of New York. As you have been a lifelong city official, I can imagine what this opportunity to serve the community feels like.
Eric Adams has just been sworn in as the new mayor of New York. If you’re a bitcoin fan, you’ve probably heard it’s an ally. Following Miami Mayor Francis Suarez receiving a full paycheck in bitcoin, Mayor Adams pledged to take his first three paychecks in bitcoin. Good news for New York crypto enthusiasts, right? Well, New York bureaucracy prevents him from accepting that salary directly in bitcoin. Unfortunately, more than anything, his good intention showcases the Empire State’s many regressive policies toward cryptocurrency.
The best-known payment platform for taking your salary in bitcoin is Strike. Strike, created by Jack Mallers, is used by some of the world’s most prominent personalities, such as National Football League player Russell Okung, as a trusted way to accept their bitcoin paycheck. Beyond that, Strike powers payments for citizens of El Salvador, the first nation to legalize bitcoin as a means of payment. So, I assumed that Mayor Adams would use Strike as a way to accept his salary in bitcoins. Well, my guess was incorrect because Strike is not available in New York! So how will Mayor Eric Adams accept his bitcoin salary? As Kevin Dugan reported for New York Magazine, a spokesperson for the mayor said, “He’ll take his paycheck in dollars and then convert it to bitcoin through an exchange.”
Big sigh. Not only does it take longer to convert his salary to bitcoin rather than having him paid directly, but it also means he pays increased sets of transaction fees. If he uses Coinbase, America’s largest exchange, that could mean he takes 2% off his salary just in commission fees. What citizen, let alone a politician, would automatically want to receive less of his money than he has earned?
I experienced the Strike ban firsthand when I tried to set up my bitcoin tip jar with Twitter. Using the tip jar, all 200 million Twitter users would have a bitcoin wallet. However, to use the feature, you must have access to Strike, which is banned in New York and Hawaii. Quite surprising that these are the two states where it is banned. With all due respect to Hawaii, it is not considered the financial capital of the world. But, if you live in New York, you are locked out of participating in the growth of the crypto economy.
It’s not just Strike – many of the biggest crypto companies are not available in New York. For example, Binance, the largest cryptocurrency exchange in the world, is banned in the state. This means that citizens of the Big Apple are falling behind in the digital economy. One explanation for the state’s lagging behind in the growing bitcoin ecosystem is due to its negative perception of the cryptocurrency. In 2015, bitcoin was considered a pariah after the fall of the online dark web Silk Road black market. As a result of this, New York State enacted a set of restrictions against blockchain companies in New York.
Specifically, he created the “BitLicense”. Coindesk’s Alex Adelman and Aubrey Strobel describe specific issues with the BitLicense, including the fact that it forces companies to spend “…more than $100,000, beyond the means of most early-stage startups. It includes a 30-page application, $5,000 application fee, thousands of hours of work, and presentation of accounting and records for the past seven years. Of the 20 companies that have received BitLicenses, most are multi-billion dollar companies. This means that entrepreneurs living in one of the world’s capital centers are unable to build startups in the fastest growing investment sector.
The situation in New York demonstrates the growing divide in the cryptocurrency community. There are people who aim to build on the mission of anonymous Bitcoin creator Satoshi Nakamoto to create an alternative financial ecosystem for people who don’t want their savings to be devalued by 5% every year by inflation. . On the other hand, it is a community that wants to build complex financial products around crypto. For example, some New York hedge funds are creating NFT credit derivatives similar to those mortgage-backed debt securities used by banks that precipitated the financial/housing crisis of 2008. New York is the epicenter of this battle between building an ecosystem for the people and building another way for the elites to get rich.
New York Attorney General Letitia James said in March 2021 “[I’m] sending a clear message to the entire industry that you either play by the rules or we will shut you down. However, the New York rules are based on a false and outdated perception. Mayor Adams has shown enthusiasm for bitcoin, but now is the time to put words into action. The mayor must fight to reduce the red tape that prevents blockchain so that this city and this state can be part of the future digital economy.
This is a guest post by Jacob Kozy. The opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.