New York City’s new mayor, Eric Adams, plans to turn his first paycheck this week into two cryptocurrencies, which he has been touting as a potential economic engine for the city.
The Democrat’s office announced Thursday that Adams’ first salary payment will be deposited into Coinbase, an online exchange used to buy cryptocurrencies, and then converted to Ethereum and Bitcoin.
“New York is the center of the world and we want it to be the center of cryptocurrency and other financial innovations,” Adams said in a statement.
“Being at the forefront of such innovation will help us create jobs, improve our economy and continue to be a magnet for talent from around the world.”
The city noted in its press release that federal labor regulations prohibit the city from paying employees in cryptocurrency, but that any worker who is paid in US dollars can use an exchange to buy cryptocurrency.
Adams faces criticism for cryptocurrencies
Adams’s use of his public office to promote the crypto industry drew criticism from at least one upstate New York environmental group, the Seneca Lake Guardian, which noted that creating and managing cryptocurrencies can consume enormous amounts of energy, often produced by power plants that contribute to climate change.
“Mayor Adams is dead wrong and his ignorance could cost New Yorkers millions of dollars in energy bills while killing local economies, poisoning our water and filling our air with deadly CO2 emissions,” the group said in a statement.
State Attorney General Letitia James investigated cryptocurrency trading platforms, warning last year that investors “should proceed with extreme caution when investing in virtual currencies.”
“Cryptocurrencies are high-risk, unstable investments that could result in devastating losses as quickly as they can generate profits,” James said.
Adams has suggested that cryptocurrency technology and blockchain, a digital ledger where virtual currency transactions are recorded, should be taught in schools.
Decentralized currencies that use encryption technology to track transactions, cryptocurrencies are not backed by governments, a central bank, interest rates, or a long history of exchange rates against other currencies. That can make it difficult to assess its value.
Investors rely on market-driven changes in the value of cryptocurrency to make a profit.
‘I lost thousands of dollars in the stock market’
Asked in November if it would be poor economic strategy and a conflict of interest for the mayor, Adams told CNN he was “using [his] personal money I lost thousands of dollars in the stock market during the stock market crash in my retirement fund. Volatility is part of some of the investments we make.”
In November, Adams flew to a political conference in Puerto Rico on the private jet of Brock Pierce, a former child actor and cryptocurrency entrepreneur.
A spokesperson for Adams at the time told The New York Post that Adams paid for the trip through a travel agent.
New York City Comptroller Brad Lander, whose office oversees public pension funds, said the city’s retirement systems have no plans to invest in digital currencies.
“We are concerned about both the volatility and energy consumption of cryptocurrencies and will continue to closely watch developments in the cryptocurrency industry,” said Shaquana Chaneyfield, a spokesperson for Lander.
David Yermack, chairman of the finance department at New York University’s Stern School of Business, called the announcement “little more than a publicity stunt.”
“It’s no different than taking your regular paycheck earnings and just buying Bitcoin for yourself,” Yermack said in an email.
While the US government and many states are wary of cryptocurrencies, a small number of cities and local officials have embraced them.
Miami Mayor Francis Suarez, a Republican, has been converting his salary to Bitcoin and tried to position his city as the center of the cryptocurrency industry.
Suarez, a friend of Adams, said in a speech this month as the new president of the US Conference of Mayors that cities need to embrace the industry, calling on mayors to “sign a crypto mayoral compact.”
Suarez told The Associated Press in an interview in November that Adams’ embrace of crypto shows he understands that “cities need to be at the forefront of innovation.”
A former Seminole County, Florida, tax collector set up systems to accept cryptocurrency for payments of property taxes and other fees, though no payments were ever accepted.
www.euronews.com
George is Digismak’s reported cum editor with 13 years of experience in Journalism