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Comptroller's response to mayor's surprise Bitcoin-backed bonds proposal

3:53:22

·

151 sec

Council Member Brannan inquires about the mayor's unexpected announcement of Bitcoin-backed bonds made during a crypto event in Las Vegas. Comptroller Lander expresses surprise and strong opposition to the idea.

  • The Comptroller's office was not informed of the proposal beforehand
  • Bitcoin-backed bonds likely do not comply with the city's bond issuance criteria
  • Concerns raised about the use of taxpayer money for the mayor's Vegas trip
  • Comptroller deems the proposal 'unacceptable' regardless of who funded the trip
Justin Brannan
3:53:22
So in a crypto event that the mayor attended in Las Vegas earlier this week, he announced, to our surprise, New York City would issue bit bonds.
3:53:31
Did the administration give you a heads up before they announced this great idea?
Brad Lander
3:53:36
We read about it in the paper as well and were as surprised as you.
3:53:40
Perhaps more surprised since we partner with them on the issuance of bonds.
3:53:45
And yes, there there we will not be partnering in the issuing of any Bitcoin backed bonds on in on my watch as controller.
Justin Brannan
3:53:56
And and is that because the asset class is just renowned for chaos and fluctuation?
Brad Lander
3:54:02
Yes.
3:54:02
And it is renowned for chaos and fluctuation, and it probably does not comply with the city's bond issuance criteria.
3:54:11
What you know, there are folks around the country who do use bonds for expenses, but New York City famously does not do that.
3:54:18
We got in a lot of trouble during the fiscal crisis doing it.
3:54:21
So we only use our bonds for capital assets, and Directive Directive
UNKNOWN
3:54:27
identify Bitcoin as a capital asset.
3:54:30
And that's actually I
Brad Lander
3:54:31
mean, a Bitcoin backed bond has, as I understand it, and I'm not an expert in this, but 10% of it is used to purchase Bitcoin, to purchase cryptocurrency, which just on its face would not be compliant with Directive 10 and the city's rules for bond issuance.
3:54:49
So besides being a wacky idea
Justin Brannan
3:54:53
What was our mayor thinking?
Brad Lander
3:54:56
That's dangerous to speculate on.
3:55:00
Mean I
Justin Brannan
3:55:01
We asked OMB and it wasn't like he let them know he was going to bring this up.
3:55:07
No.
Brad Lander
3:55:07
I mean, yes.
3:55:08
I think it was, know, look.
3:55:10
And this is serious.
3:55:11
Know, like we it's it's I guess it was reported that taxpayers paid for the trip to Vegas.
3:55:17
I think it's probably worth looking at, like all those expenses, which ones were paid by taxpayers and which ones, if any, were paid by the Bitcoin organizers of the conference.
3:55:27
Either way, it's highly problematic.
3:55:28
Should not be taxpayer dollars spending for him to go to Vegas, but it also should not be that bitcoin bros are paying for the mayor to go on a marketing trip, so whether he had some obligations as a result of who paid for the trip, or whether he genuinely believes it would be a good idea, it is really quite unacceptable either way.
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