Dear Mayor Adams, I would like to begin by congratulating you on your election as mayor of New York City. Being a lifelong official of the city, I can imagine what this opportunity to serve the community feels like. Eric Adams has just been sworn in as New York City’s new mayor. If you are a fan of Bitcoin, you have probably heard that it is an ally. Following the lead of Miami Mayor Francis Suarez, who has received a full paycheck in bitcoin, Mayor Adams pledged to take his first three paychecks in bitcoin. Good news for crypto enthusiasts in New York, right? Well, New York’s red tape keeps him from accepting that salary directly in bitcoin. Unfortunately, his good intentions more than anything demonstrates the Empire State’s many regressive policies towards cryptocurrency. The best-known payment platform for withdrawing your salary in bitcoin is Strike. Strike, created by Jack Mallers, is used by some of the world’s most prominent figures, such as National Football League player Russell Okung, as their trusted way to accept their paychecks in bitcoin. In addition, Strike provides payments for citizens in El Salvador, the first country to legalize bitcoin as a means of payment. So I assumed Mayor Adams would use Strike as his way of accepting his bitcoin salary. Well, my assumption was wrong, as Strike is not available in New York! So, how will Mayor Eric Adams accept his salary in bitcoin? As Kevin Dugan reported for New York Magazine, a spokesperson for the mayor stated, “He will take his dollar salary and then convert it into bitcoin through an exchange.” Big sigh. Not only is it more time consuming to convert his salary into bitcoin rather than getting it paid directly, but it also means he pays higher transaction fees. If he uses Coinbase, the most prominent exchange in America, that could mean he gets 2% of his salary, just in commission fees. What citizen, let alone politician, would automatically want to withdraw less of their money than they earned? I experienced the Strike ban first hand when I tried to set up my Bitcoin tip jar with Twitter. Using the tip jar, Twitter’s 200 million 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. Pretty surprising that those are the two states where it’s banned. With all due respect to Hawaii, it is not considered the financial capital of the world. But living in New York will keep you from participating in the growing crypto economy. It’s not just Strike – many of the biggest crypto companies are not available in New York. For example, Binance, the world’s largest cryptocurrency exchange, 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 backwardness in the growing bitcoin ecosystem is due to the negative perception of cryptocurrency. In 2015, bitcoin was considered a pariah after the fall of the online dark web black marketplace Silk Road. In the wake of that, New York State has passed a series of restrictions against blockchain companies in New York. It specifically created the “BitLicense”. Coindesk’s Alex Adelman and Aubrey Strobel describe the specific problems with the BitLicense, including that it forces companies to “…spend more than $100,000, which exceeds the resources of most early-stage startups. It includes an application of 30 pages, $5,000 application fee, thousands of man-hours, and the presentation of accounting and records from the past seven years.Of the 20 companies awarded BitLicenses, most are multi-billion dollar companies.” This means that entrepreneurs living in one of the world’s centers of capital are unable to build startups in perhaps the fastest growing investment sector.The situation in New York shows the growing divide in the cryptocurrency community.There are people who want to build on the mission of the anonymous creator of Bitcoin, Satoshi Nakamoto, to create an alternative financial ecosystem for people who don’t want their savings to be devalued by 5% every year due to inflation. community that wants to build complex financial products around crypto.For example, some hedge funds in New York are creating NFT credit derivatives similar to those mortgage-backed debt obligations used by the banks that triggered 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 enrich themselves. New York Attorney General Letitia James stated in March 2021 “[I’m] send a clear message to the entire industry that you are following the rules or that we are closing you.” However, the rules in New York are based on a false and outdated perception. Mayor Adams has shown enthusiasm for bitcoin, but now it’s time to put words into action. The mayor must fight to reduce the red tape that is holding back blockchain so that this city and state can be part of the future digital economy. This is a guest post by Jacob Kozy. The views expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine
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