CFO Lander clearly rejects Adams' Bitcoin bond course!

CFO Lander clearly rejects Adams' Bitcoin bond course!

New York Mayor Eric Adams' proposal to back municipal bonds with Bitcoin is drawing sharp criticism. New York City finance chief Brad Lander strongly rejects the idea and warns of the potential financial risks that the introduction of Bitcoin-backed bonds could pose. Lander expresses concerns that this push could undermine investor confidence and states that he will not allow cryptocurrency-linked debt during his term. He emphasizes the responsibility he shares with the Mayor's Office for Management and Budget regarding the debt issuance.

“Cryptocurrencies are not stable enough to guarantee the financing of important infrastructure, social housing initiatives or schools,” said Lander. This viewpoint becomes particularly relevant given the current economic uncertainties. Eric Adams announced the launch of the new municipal bond, which will be called “Bitbond,” on May 28 at the Bitcoin 2025 conference in Las Vegas. In addition, he called for the abolition of New York State's controversial BitLicense program, which points to the importance of a general openness to crypto technologies.

Bitbond model details

A policy brief from the Bitcoin Policy Institute outlines a model for BitBonds that provides an annual interest rate of 1% over a period of 10 years. Lander and his team created a simulated model that guarantees investors 100% of Bitcoin appreciation up to the 4.5% annual return threshold. Once this threshold is exceeded, 50% of additional appreciation would go to investors, while the city retains the remaining 50%.

The proposal calls for 90% of the funds raised to be used for government spending, while 10% is earmarked for purchasing Bitcoin as a strategic reserve. Adams has not yet provided any further details on exactly how the Bitbond program works, which has left some investors and analysts skeptical.

Looking at political ambitions

Brad Lander, who is considered a possible candidate for mayor in November and is running as a Democrat, sees himself in a position of responsibility to ensure the city's financial stability. Adams, on the other hand, is running as an independent and aims to lead the city into a modern era of financial innovation. The dispute over Bitbond could therefore also integrate a broader political debate about the handling of cryptocurrencies and their role in public finance.

In summary, Eric Adams' proposal to create Bitcoin-backed bonds outlines some of the key financial and policy issues that will concern New York City in the coming months. Experts and policymakers will be closely monitoring how this conflict between innovative financing approaches and the need for stable, trustworthy financing develops.