The Lex Newsletter: New York resists the crypto values ​​of Eric Adams

The Lex Newsletter: New York resists the crypto values ​​of Eric Adams

dear reader,

Bitcoin could be about 35 percent below his November highest stands. But the popular digital currency-which can be a huge bladder/ponzi system-still has many cheerleaders. Among them is the new mayor of New York City, Eric Adams. Since taking office, the 61-year-old Democrat from the Big Apple has been spoken as a crypto hotspot.

He suggested that schools should teach children something about cryptocurrency and that the city should have its own digital currency coin. He started a friendly rivalry with his crypto enthusiast and the mayor of Miami, Francis Suarez. According to Suárez said that he would receive his next salary check in Bitcoin - in a little superiority - to take his first three salary checks in this way.

Both Suarez and Adams made their promise in November when the token approached his all -time high of $ 64,500. Adams officially received his first salary check on January 21. Since the Federal Working Act does not allow New York work to pay employees in cryptocurrency, the mayor had to use the cryptocurrency exchange Coinbase to convert his content into Bitcoin and Ethereum. Bitcoin was traded at around $ 36,500 that day. Ethereum was traded at $ 2,565 compared to $ 4,818 in November.

Adams, who earns $ 258,750 a year, did not say how he divided his salary on the two cryptocurrencies. But assuming a 50/50 division would now be worth $ 440 more, mainly due to a Bitcoin rally.

For Adams, moving in his salary in crypto is a nice piece of PR that shows that he is up to date for a mayor with the latest financial trends. But it also emphasizes something about Bitcoin. The cryptocurrency may have become more mainstream, but it remains as volatile as ever.

Wild price fluctuations indicate that those who choose publicly for those who can afford it. In an interview with CNN, the New York Mayor wiped questions about possible losses and found that he was a "long -term investor" in crypto. He can probably pay his rent or mortgage in crypto, or he has the luxury of making a living from existing savings. I suspect it is the latter.

There is also a discrepancy between Adam's crypto enthusiasm and the caution of other civil servants. The state of New York has one of the country's strictest regulatory systems when it comes to virtual currencies. Letitia James, the Attorney General, has acted against the sector and closed a number of non-registered crypto trade and credit companies. That was after warning the industry: "Play according to the rules or we will close it."

The official disapproval is one reason why Wall Street sneaks around cryptocurrencies on the tips of the toe. Sheer skepticism compared to application cases is different. JPmorgan Chase boss Jamie Dimon described Bitcoin as "worthless". He is pleased that the bank acts with cryptos, as the regulation allows because they are "adults". Most banks still have young crypto desks, mainly to offer options in the event that the tokens continue to penetrate the mainstream.

Adams is therefore something of a runaway within the urban establishment. He is right when he urges the New York schools to train students financially. But the priority of the educators should be to teach the children weekly budgeting and percentages with which they can later wrestle in the form of interest for subprime loans.

New York is an expensive city in which income ease is widespread. A careful government, progressive taxation and reasonable public expenses can defuse these problems. Investments in volatile cryptocurrencies cannot do so.

Enjoy the rest of your week.

Pankwan Yuk
Lex-Autor


Source: Financial Times

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