By David Z. Morris
Eric Adams will be the next mayor of New York City. The former New York Police Department cop was declared winner of the Democratic primary yesterday, so unless there’s an improbable surge from his Republican opponent, cat-rescuer and Guardian Angels founder Curtis Sliwa, Adams will take over from Mayor Bill de Blasio in January following November’s general election.
I live in New York City, and I hate to perpetuate the general media’s East Coast bias, but in this case, a mayoral election really seems to matter outside the city – especially for cryptocurrency businesses and traders. New York has some of the country’s most restrictive cryptocurrency rules, the much-bemoaned “Bitlicense.” That’s particularly onerous because New York City is a major financial center, so the 2014 law has hampered crypto offerings by New York City-based entities, and to New York residents.
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But Adams has been vocally pro-crypto, saying in late June that New York City would become the “center of bitcoins” under his leadership. Adams isn’t nearly as passionate about bitcoins as erstwhile mayoral rival Andrew Yang, and from his slight malapropism it’s a fair guess Adams is not exactly a crypto expert, though he did also speak positively about crypto in 2015.
Instead, Adams’ promise (like his statements in 2015) came in the middle of a much broader endorsement of disruptive innovation. New York City, Adams said, should “become the center of life science, the center of cybersecurity, the center of bitcoins … We’re going to be the center of all the technology.”
In short, Adams seems to be more focused on well-paying jobs and a vital economy than on changes to the status quo of financial regulation. In many ways, this is hugely bullish for the sector, a sign that “crypto” is stealing some limelight from “Silicon Valley” as a synecdoche for innovation and growth. And New Yorkers were eager for that message thanks to an unemployment rate of 10.9% in May, far above the national rate of 5.9%. That’s probably thanks above all to the loss of tourism, which is a huge driver of the New York economy, during the coronavirus pandemic.
It’s also a meaningful signal locally given the 2019 progressive backlash against plans to build an Amazon headquarters in the borough of Queens, which had its justifications but was seen by some as anti-jobs. Adams is more of a centrist than those anti-Amazon activists, and has aimed mostly at appealing to blue-collar New Yorkers. Much of his platform focuses on small business, but the nod to tech is part of that larger promise of more and better jobs.
It’s not as if Adams has much sway on the crypto issue anyway: The Bitlicense was imposed by state legislators in Albany, and the New York mayor generally has a contentious, if not outright hostile, relationship with the state capital. His chances to get any changes on the Bitlicense are close to nil.
So if Adams wants to make New York City more of a “center of bitcoins,” his real options include the kind of programs he pursued as Brooklyn borough president, including investment in STEM programs for local students. It’s an uphill battle to get more hometown kids into the pipeline for the local tech industry, but if any city can pull it off it’s New York, which has some of the country’s most well-regarded public secondary schools and universities.
It’s also possible that Adams’ quality-of-life measures could help attract new businesses or individuals to the city. Those include enhanced child-care services and a firm-but-just approach to violent crime, which has been edging up. The timing would certainly be right, given an ongoing outmigration from the San Francisco Bay Area and a historic dip in rents in New York City.
But those are ultimately edge issues – New York’s advantages for crypto or any other business are bigger and longer lasting than any one mayor. That’s made clearest by the comparison to Miami, which has also made a recent push to attract crypto businesses, but has some serious disadvantages in the effort. To pick just one, only 29.8% of Miami-Dade County residents have a bachelor’s degree, according to census data, compared to 37.5% in Brooklyn and 61.3% in Manhattan.
Traditionally, that difference in talent pool has been a determining factor. Businesses hoping to hire the very best people, which usually includes the most innovative companies, are more likely to locate near big talent pools. That’s why despite the hassle of the Bitlicense for companies that move crypto, the city is already the home to important blockchain firms, including Chainalysis, Grayscale and its sister company, CoinDesk.
Of course, that calculus has itself changed dramatically during the pandemic. The new acceptance of work from home (WFH) means companies are more likely to hire employees who don’t live near their headquarters, especially for white-collar tech and information jobs. New York City currently stands to lose as much as $720 million in tax revenue from commuters who aren’t working in the city. So while he may make some efforts to make New York into a friendlier city for crypto, Adams’ most important task will be simply keeping the city a place where people actually want to live.