New York mayor invests his first salary in cryptocurrency

NEW YORK (AP) — New York City Mayor Eric Adams plans to convert his first paycheck this week into two cryptocurrencies, which he has touted as a potential economic engine for the city.

The Democrat’s office announced Thursday that Adams’ first salary payment will be deposited with Coinbase, an online platform used to buy cryptocurrency, 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 innovation,” Adams said in a statement. “Being at the forefront of this innovation will help us create jobs, improve our economy and continue to attract talent from around the world.”

The city noted in its press release that federal labor rules prohibit the city from paying employees in cryptocurrency, but any worker paid in US dollars can use an exchange to purchase cryptocurrency.

Adams’ use of his public office to promote the crypto industry drew criticism from at least one upstate New York environmental group, Seneca Lake Guardian, who noted that the creation and Cryptocurrency management can consume huge 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 C02 emissions” , the group said in a statement.

State Attorney General Letitia James investigated cryptocurrency trading platforms and warned last year that investors “should proceed with extreme caution when investing in virtual currencies.”

“Cryptocurrencies are high-risk, volatile investments that could result in devastating losses as quickly as they can generate gains,” James said.

Adams suggested that cryptocurrency and blockchain technology, a digital ledger where cybercurrency transactions are recorded, should be taught in schools.

Cryptocurrency is a type of digital currency that uses encryption technology to track transactions. They don’t have a country’s government backing them, a central bank, interest rates, or a long history of exchange rates against other currencies. This can make it difficult to assess their value.

Investors rely on market-induced changes in the value of cryptocurrency to make a profit.

When asked in November if this would be bad economic strategy and a conflict of interest for the mayor, Adams told CNN, “I use my personal money. I lost thousands of dollars in the stock market when my pension fund crashed. Volatility is part of some of the investments we make.

In November, Adams flew to a political conference in Puerto Rico aboard 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 ride through a travel agent.

New York City Comptroller Brad Lander, whose office oversees public pension funds, said the city’s retirement systems are not considering investing in digital currencies.

“We are concerned about both the volatility and energy consumption of cryptocurrencies, and we will continue to closely monitor developments in the cryptocurrency industry,” said Shaquana Chaneyfield, spokesperson for Lander. .

David Yermack, chair of the finance department at New York University’s Stern School of Business, said the announcement was “little more than a publicity stunt.”

“It’s no different than taking the proceeds of his regular salary and just buying Bitcoin for himself,” Yermack said in an email.

While the US government and many states are wary of cryptocurrency, a small number of cities and local officials have embraced it.

Miami Mayor Francis Suarez, a Republican, converted his salary to Bitcoin and attempted to position his city as the hub of the cryptocurrency industry.

Suarez, a friend of Adams, said in a speech this month as the new president of the United States Conference of Mayors that cities must embrace the industry, and he asked mayors “to sign a municipal cryptography pact”.

Suarez told The Associated Press in a November interview that Adams’ embrace of cryptocurrency shows he understands that “cities need to be on the cutting edge of innovation.”

A former tax collector in Seminole County, Florida, has systems in place to accept cryptocurrency for property tax payments and other fees, although no payment has ever been accepted.

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