Eric Adams, the city’s elected mayor is governing the city openly, making Empire Metropolis more business and technology friendly and the delight of the crypto community
Eric Adams Making New York a Cryptocurrency Hub
Although his official term as mayor of New York City begins in about 1.5 months, Eric Adams, the city’s elected mayor, has already begun governing the city openly. Making Empire Metropolis more business and technology-friendly is at the top of Adams’ preliminary agenda, and the incoming mayor made his point by repeatedly claiming to be all that Bitcoin (BTC) is and to be, much to the delight of the crypto community.
Adams, a former Brooklyn district president, and the police officer made a series of crypto-friendly pronouncements in the days following his November 2 triumph, ranging from a promise to pay three salaries in Bitcoin first to a plan to incorporate digital finance courses into the school curriculum.
However, the mayor’s office is simply one of the numerous power centers that influence banking industry rules—not the most powerful. New York State’s present regulatory capabilities make it one of the more difficult US states to navigate for crypto firms. So, what authority does New York City’s mayor have to effect genuine change?
Cryptocurrency Regulations in New York State
The addition of a top city official with a cryptocurrency interest is a positive move for one of the world’s most important financial centers. According to Gary DeWaal, president of the firm’s financial markets and regulatory group, New York is one of the most difficult places in the United States to undertake digital asset-related business. Cointelegraph spoke with Katten Law.
The main source of this issue, according to DeWaal, is that New York’s BitLicense regime requires enterprises to obtain licenses for a wide range of crypto-related operations that engage New York State or its people in financial services.
Receiving digital currencies for the purpose of transferring or transferring the storage, holding, or maintaining custody of cryptocurrency on behalf of others, buying and selling cryptocurrencies, or performing exchange services with a customer’s company, and controlling, managing a digital currency or output are all examples of these activities.
The BitLicense is not required for mining operations or enterprises that sell their services and products in exchange for electronic money, according to Konstantin Boyko-Romanovsky, CEO of blockchain company Allnodes. “It’s a start,” he added, “but it’s a small niche that needs to be expanded.”
The purpose of these regulations, according to Bo Oney, Head of Compliance at Bitcoin ATM operator Coinsource – one of the first to receive a BitLicense in New York State – has always been to protect consumers, deter bad actors, and establish operational and accountable obligations for Crypto companies. However, Oney concedes that enforcing these principles isn’t always easy:
“It is true that the time and delay in getting your BitLicense can be frustrating. Optimizing the application process and improving correspondence times with NYDFS should be a top priority for improvement. ”
Consequences of BitLicense
NewYorkCityCoin (NYCCoin), a digital asset that allows users to mine the city’s coffers while also delivering rewards through the Stacks protocol and its native STX token, was released last week by the community-focused cryptocurrency project CityCoins. Adams has excitedly welcomed the launch of NYCCoin, despite the fact that CityCoins has not yet officially collaborated with New York City for this program.
However, there is a catch. There is no legal way for New Yorkers to mine coins for the city’s benefit.
As a resident of New York State, Cointelegraph Senior Editor Jonathan DeYoung — a New Yorker who recently produced a crypto guide to NYC for Cointelegraph Magazine – notes, he has no option of purchasing STX because it is not listed on any exchange BitLicense is available:
“STX is required to mine NYCCoin, which means I cannot mine NYCCoin efficiently even though I live in NYC. Of course, you could use a VPN and buy it through a non-KYC platform like Binance, but it’s ironic that the average NYC resident would be banned from mining their city’s coin. ”
Of course, you could use a VPN and purchase it on a non-KYC platform like Binance, but it’s amusing that the typical New Yorker would be prohibited from mining his city’s coin.
While a BitLicense holding exchange like Coinbase backing the token could fix the inconsistency in the near term, this implies that the present New Yorker regime could cut off crucial components of the digital asset infrastructure in the long run.
Enforcement is not a pleasant experience
The New York State Attorney General is another relevant source for crypto firms wishing to sell services to New Yorkers. Acting Attorney General Letitia James, who has stated her ambition to run for governor next year, has already sought strong coercive tactics against crypto industry actors and issued several warnings about the hazards of bitcoin trading.
In fact, even before James took office in early 2019, the New York Attorney General was looking into the digital assets industry. DeWaal von Katten made the following statement on Cointelegraph:
“The publication of the report of the Virtual Market Integrity Initiative by the New York Attorney General in September 2018 was named by certain cryptocurrency platforms and their compliance with a number of best practices or allegedly problematic – after certain relevant information was voluntarily provided by platforms – are not helpful in promoting New York as a blockchain-friendly local. ”
According to DeWaal, this strategy is more akin to “public attribution and disgrace” than “removing the bad apples through the proper legal process.”
What can be done about it?
Changing the BitLicense system to allow more companies to lift the compliance lock and speed the approval process might be a critical step toward establishing New York as a crypto destination. However, as DeWaal put it, this was not in Adams’ hands:
“Ultimately, it will be up to the New York State Department of Financial Services to try to speed up the Bitlicense application process and identify regulatory requirements that can be made more business-friendly.”
To make significant modifications to the BitLicense scheme, the Albany state legislature must act.
Oney discovered that putting in place regulatory sandboxes to stimulate financial innovation has worked well elsewhere. On Cointelegraph, he said:
“Other jurisdictions have been very successful in driving innovation through sandboxing, such as the FCA in the UK, where early-stage technology companies can speak directly to institutions, run in their sandbox and test and validate the applicability of solutions in the real world.”
While establishing a fintech sandbox in New York Local will undoubtedly necessitate the cooperation of various city agencies, it is realistic to expect the mayor to lead the charge.
Finally, there is a vast collection of tools available in the public domain. The role of the executive branch of the New York City government offers a lot of leeway in addressing the audience of over 8 million potential crypto allies, from raising awareness of the benefits and opportunities of blockchain technology and digital assets to appointing a deputy mayor with a focus on strategically promoting fintech-related initiatives, such as appointing a deputy mayor with a focus on strategically promoting fintech-related initiatives.