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New York City's fiscal guardian has halted Mayor Eric Adams' controversial proposal to issue Bitcoin-backed municipal bonds. Comptroller Brad Lander declared the plan would jeopardize the city's financial credibility while exposing taxpayers to cryptocurrency volatility. The May 29 veto creates a rare public rift between two potential election rivals as both prepare for November's mayoral race.
Lander's office released analysis showing Bitcoin's 180-day volatility averaging 【67%】 compared to municipal bonds' typical 【3-5%】 fluctuation. "Our schools and subway repairs shouldn't depend on crypto speculation," stated the comptroller, noting bondholders traditionally expect predictable returns. The rejection cites Directive 10 rules prohibiting speculative instruments for capital projects.
——This marks the first major US city to formally reject crypto-based public financing——
The clash reveals competing philosophies about technological adoption in government. Adams pitched "BitBonds" at the Las Vegas Bitcoin Conference, framing them as tools for modernizing infrastructure funding. Meanwhile, Lander's team emphasized protecting the city's AAA credit rating, currently held by only 【12】 major US municipalities.
Documents reveal the proposed bonds would have shared Bitcoin price gains between investors and city coffers. However, simulations show taxpayers bearing 【90%】 of downside risk during crypto winters. The Bitcoin Policy Institute's model—which inspired Adams' plan—assumed annual BTC growth exceeding 【15%】, a figure Lander called "dangerously optimistic."
Remarkably, the comptroller's office found that under 2022's market conditions, the scheme could have cost NYC 【$2.3 billion】 in lost revenue versus traditional bonds.
With Adams running as an independent against Democrat Lander, the dispute may foreshadow campaign themes. The mayor's team maintains blockchain technology could attract 【$4 billion】 in new infrastructure investment, while opponents warn of "techno-populism" undermining fiscal responsibility. Observers note the debate mirrors wider tensions between progressive Democrats and tech-aligned independents.
The veto comes as New York reconsiders its BitLicense framework, with Adams advocating for repeal. Ironically, the same volatility that disqualified Bitcoin bonds may strengthen arguments for stricter crypto oversight. As of press time, Bitcoin trades at 【$61,200】, down 【18%】 from its 2025 peak.
Industry analysts suggest the episode demonstrates growing pains in merging decentralized finance with traditional governance structures. While Miami successfully issued 【$25 million】 in blockchain-based bonds in 2024, no major city has yet adopted cryptocurrency-backed debt at scale.