Eric Adams, the Mayor of New York City (NYC), is advocating for the abolishment of the stringent BitLicense scheme for cryptocurrency exchanges, which, according to the mayor, is stifling innovation and economic growth.
BitLicense Rule not Beneficial for New York
Adams made the suggestion while speaking at the Crypto and Digital Assets Summit held by London-based daily newspaper, the Financial Times, on Wednesday (April 27, 2022). The NYC mayor said the licensing procedure seemed to put New York at a disadvantage.
According to Adams:
“New York State is the only state to require a license for crypto companies. That’s a high barrier, and it just makes us less competitive. We have to continue to be competitive.”
The New York Department of Financial Services (NYDFS) first introduced a cryptocurrency regulatory licensing rule called BitLicense in 2015. Crypto firms in the state looking to acquire the license will pay an application fee of $5,000 and would undergo strict requirements.
However, the BitLicense scheme has come under intense criticism from the digital asset community because of the rigorous process involved. In June 2020, the NYDFS regulator called for comments on a proposed conditional BitLicense to encourage cryptocurrency businesses to operate in New York.
Adams’ comment to scrap the BitLicense, meanwhile, was not well received by some proponents of the rule. According to the executive director of the New York-based Strong Economy for All Coalition, Michael Kink, the rule is necessary for a speculative and deregulated sector like crypto.
Also, contrary to the mayor’s statement about the BitLicense hampering innovation, Lee Reiners, the executive director of the Global Financial Markets Center at Duke University, said that it boosts consumers’ confidence in the cryptocurrency market.
Shortly before Adams’ pro-crypto comment, the New York State Assembly passed a bill that places a two-year moratorium on proof-of-work (PoW) crypto mining facilities that use carbon-based energy.
Adams Doubles Down on Crypto and Blockchain Education
The NYC mayor also revealed plans to use blockchain technology for the city’s record-keeping. According to Adams, incorporating blockchain цould help prevent fraud and ensure the authenticity of documents such as birth certificates and housing deeds.
Furthermore, the mayor said his government is building blockchain crypto campuses to enable young people better understand the burgeoning industry. The US politician made a similar statement when he was newly elected.
Adams is an advocate of crypto and has expressed commitment to making NYC a Bitcoin hub. After assuming his mayoral role in January 2022, the politician affirmed that he would receive his first three paychecks in BTC and ETH.