Democratic candidate for New York City Comptroller, Reshma Patel, wants the city to invest in crypto and blockchain-based companies.
Patel discussed the details of her plan during a recent Unchained podcast. She prefaced it by saying that New York City is just emerging from the COVID-19 pandemic and its economic fallout. In light of this, she said the city needs to think ahead about how to leverage new technologies; “I really believe that blockchain is a tool that can really help city government in terms of transparency and accountability,” the Democratic candidate said.
Patel added that cryptocurrencies could help diversify the city’s pension fund. For example, as a long-term hedge against inflation, or if public markets go south, “and the S&P goes down.” In those instances, she believes “investing in crypto would be a really wise thing.”
In addition to public investments in cryptocurrencies, Patel also advocates incentivizing blockchain-based companies to settle in New York. “We need to have more favorable conditions so that we get blockchain companies to come and start businesses in New York City as we rethink what this new economy looks like,” she concluded.
1-3% crypto allocations
When announcing her plans, Patel said she wanted to allocate up to 3% of the city’s pension funds to cryptocurrencies. and explained how that process might work.
Patel said that the comptroller is the custodian of pension funds, but responsibility also falls to trustees of the funds. She added that New York City has five different pension funds in its pension system. To move forward with the plan, the comptroller would need to receive approval from the funds’ trustees.
At that point, there would be an investment committee, which would then look at the plan and make recommendations. Patel noted that one of these recommendations would be deciding which cryptocurrencies to invest in while another would decide how much to invest in each. For her part, Patel said that she proposes bitcoin and ether at this point.
Following Miami’s lead
Other cities in the United States have also been considering making public investments in cryptocurrencies. For instance, in December 2020, Miami Mayor Francis Suarez said that he was “open to exploring” putting 1% of the city’s treasury reserves in Bitcoin.
Suarez later took this a step forward. In March 2021, he announced that the city’s commissioners had supported his resolution to enable a range of bitcoin-related undertakings. These included city employees getting paid in bitcoin, residents paying taxes in bitcoin, and even the city accepting payments in BTC.