Comptroller Brad Lander Pours Cold Water on Mayor Adams’ BitBonds Proposal

New York, NY — In a preliminary analysis of BitBonds, cryptocurrency based municipal bonds, that New York City Mayor Eric Adams proposed at Bitcoin 2025, New York City Comptroller Brad Lander found the move legally dubious and fiscally irresponsible.

Comptroller Lander issued the following statement: 

“New York City will not be issuing any Bitcoin-backed bonds on my watch. Mayor Eric Adams may be willing to bet our future on crypto in exchange for a trip to Vegas, but my job is to ensure our City’s financial stability. Cryptocurrencies are not sufficiently stable to finance our City’s infrastructure, affordable housing, or schools. Proposing that New York City should open its capital planning to crypto could expose our City to new risks and erode bond buyers’ trust in in our City.”

Unlike a standard 10-year Treasury bond, only 90 percent of the BitBonds funds go to traditional government expenditures, while 10 percent is used to purchase Bitcoin for the Strategic Reserve. However, while the federal government issues bonds to fund traditional expenditures, New York City primarily issues bonds to fund capital assets and in only very narrow circumstances can the City finance other purposes. According to Comptroller’s Directive 10, “Capital Assets” are major assets that benefit more than a single fiscal period that may be tangible or intangible and meet the minimum cost, minimum useful life, and other criteria for capital funding. Capital Assets are either to the object of a planned capital construction or purchase or to an existing asset obtained or controlled as a result of past transactions, events, or circumstances.

According to Bitcoin, BitBond investors receive 100% of Bitcoin appreciation up to a threshold, for instance a 4.5% compound annual return ($155.30 per $100 bond over 10 years). Upon achieving the threshold, investors receive 50% of additional Bitcoin appreciation. The government retains the remaining 50% of gains beyond the threshold. Municipal bonds issued on a tax-exempt basis are subject to federal arbitrage tax rules, which limit the purposes for which debt can be issued and limit the earnings on the proceeds of such debt. The current Federal Tax Law regime would most likely neither permit tax exempt financing for acquiring cryptocurrency nor permit investment gains in excess of the federally subsidized financing cost.

In addition, New York City would have to be able to take transactions in Bitcoin in order to issue bonds backed by Bitcoin. However, New York City has neither any mechanism to pay for its Capital Assets in any other currency besides the US Dollar nor any means to convert Bitcoin to US Dollars. All of the City’s payment obligations, capital or operating, are presently denominated in US Dollars.

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