No longer are cryptocurrencies solely the province of investors and financiers. As recognition of blockchain technology grows, so too does the userbase. You can even buy your groceries with Bitcoin. New Mayor-Elect Eric Adams put bitcoin and cryptocurrency innovation front and center in his promises to capture the technology's potential. His biggest obstacle, however, is the "BitLicense''. To qualify for a license, businesses must provide extensive financial disclosures and prove compliance with numerous cybersecurity and anti-money laundering rules, complete audits, and more. In fact, the regulations are so stringent only twenty companies even possess a BitLicense, according to the NYC's Department of Financial Services. Even worse, state residents are banned from buying or selling bitcoin to any service providers registered outside the state. As the use of Bitcoin becomes ever more prevalent, New York is potentially losing out on a valuable new income stream; and on the very future of money itself.
Forward-thinking cities throughout America are seizing upon the innovation. If New York fails to catch up, it may lose out to Austin or Miami in the race to become the next cryptocurrency capital. Already Miami, FL, has gone one step further. In November 2021, the city's mayor, Francis Suarez, announced that Miami would be the first city in America to give a Bitcoin yield directly as a dividend to its residents. The move comes after the local government developed its own cryptocurrency, MiamiCoin. Impressively, it was reported that MiamiCoin had earned the city $21 million in revenue during the prior three months. Austin, TX, on the other hand, is also throwing its hat into the ring. Some would argue it's already the cryptocurrency capital of the US. Austin hosts a range of crypto-based businesses, including Factum, Steemit, Po.et, Arcade City, Blockchain Intel, Coin Clear, Titanium, and much more. It's a mecca for cryptocurrency engineering and innovation. But it's yet to see one of its currencies blow up like Bitcoin or Ethereum – surely, it's only a matter of time. Nevertheless, like Miami, Austin is also floating the idea of a personal city cryptocurrency. When combined with the Texas state government's efforts to attract cryptocurrency mining firms and talent to the state, New York is being left in the dust.
Perhaps the election of Adams will finally turn the city's crypto fortunes around. Tackling the BitLicense is a critical first step – as it places a stranglehold on innovation. Even big companies like PayPal find their BitLicense conditional. To meet challenges from Miami and Austin, however, NYC will need to cut the red tape and tweak the rules stopping blockchain startups from moving to the city. No business sector can thrive without attracting new talent. But they'll also need to be able to work, which means making it easier to get a BitLicense (or scrap the concept entirely). So far, all we've had is words. But it's a promising start. Now the mayor-elect must put his money – or rather, cryptocurrency – where his mouth is. It may just be the key to the city's financial services future.