Bloomberg — New Yorkers are barred from buying or selling a cryptocurrency created especially for them.
Saying they were inspired by New York Mayor Eric Adams’ vow to make the city “the center of the cryptocurrency industry,” project developer CityCoins created NYCCoin in November. The project allows people to “invest” in New York by mining and buying the tokens while also potentially profiting themselves from any price appreciation. A percentage of the tokens created are designated to be deposited in a crypto wallet to be used to benefit New York. Adams hasn’t endorsed the coin and it has no official affiliation with the city.
The coins are powered by the Stacks protocol, which uses so-called smart contracts to tie itself to the Bitcoin (XBN) network. But there is a rub. New Yorkers can create coins through the mining process, but they can’t trade them on an exchange because the state requires any crypto trading platform to have a BitLicense to operate there.
None of the crypto exchanges currently in possession of a BitLicense offer the ability to trade in NYCCoin, one of more than 10,000 digital tokens that have sprung up in recent years. People in Miami, who have access to their own MiamiCoin created by CityCoins in August, can trade both.
The crypto industry has been critical of New York’s BitLicense since the requirement was implemented in 2015. Now, new filings show that crypto companies are building a lobbying army to influence state-level regulation.
“BitLicense functions as an onerous obstacle that limits innovation,” Patrick Stanley, a lead community developer for CityCoins, told Bloomberg in an interview. “The City of New York is reviewing how they could accept and use the funds, but if there’s a lack of imagination, Miami is the model.”
New York City officials didn’t respond to a request for comment about the token.
Miami Mayor Francis Suarez has embraced the token. Nearly 4 billion MiamiCoin have been claimed and almost 12 million STX tokens have accrued in the city-dedicated wallet.
But both city-dedicated coin performance has been abysmal, data from CoinGecko and CoinMarketCap.com show. Trading volumes have dwindled, and are now measured in tens of thousands instead of hundreds of thousands of tokens. In crypto, incentives such as free tokens are often offered to investors to help generate a buzz about coins to underpin demand.
The MiamiCoin was trading around $0.0039 on Friday. Under Adams’ shorter tenure, roughly 3 billion NYCCoin have been claimed and 14.5 million STX have accrued in the NYC-dedicated wallet. NYCCoin was at $0.0019.
Maybe Adams’ arm’s-length relationship with the token is something for others to learn from.