Key Takeaways
- The comptroller said the proposed structure of BitBonds deviates from how New York City traditionally raises funds.
- Lander stated that he would not authorize the issuance of crypto-linked debt instruments during his tenure.
New York City Comptroller Brad Lander has rejected Mayor Eric Adams’ plan to introduce municipal bonds backed in part by Bitcoin called “BitBonds”, while stating that the proposal is both fiscally reckless and legally dubious.
In a sharply worded statement issued on May 29, Lander stated that he would not authorize the issuance of crypto-linked debt instruments during his tenure. “Cryptocurrencies are not sufficiently stable to finance our City’s infrastructure, affordable housing, or schools,” Lander said. “This proposal exposes the city to new risks and erodes the trust of municipal bond buyers.”
The comptroller, who shares authority over bond issuance with the Mayor’s Office of Management and Budget, said the proposed structure of BitBonds deviates from how New York City traditionally raises funds.
Unlike typical municipal bonds, which are used to finance long-term capital assets such as roads, schools, or water systems, BitBonds would allocate 10% of funds toward purchasing Bitcoin for a so-called “Strategic Reserve.” The remaining 90% would be used for general government expenditures, a breakdown Lander says does not conform with federal or city financial regulations.
The concept for BitBonds was introduced by Mayor Adams during a keynote speech at the Bitcoin 2025 conference in Las Vegas on May 28. “I believe we need to have a BitBond,” Adams told the audience. “And I am going to push and fight to get a BitBond in New York so you can do those same bond investments in New York City.”
The mayor, who has positioned himself as a pro-crypto figure since taking office, also renewed his call to dismantle the state’s BitLicense framework, which regulates crypto firms operating in New York.
A policy brief circulated by the Bitcoin Policy Institute, a crypto lobbying group, outlines a possible model for BitBonds. Under the suggested terms, investors would receive a fixed 1% annual return over 10 years, in addition to a share of Bitcoin price gains. If the value of Bitcoin increases, investors would receive 100% of the appreciation up to a 4.5% annualized return. Gains beyond that threshold would be split evenly between the investor and the city government.
However, Lander’s office highlighted that federal tax laws governing municipal bonds would likely prohibit such a structure. Tax-exempt municipal debt is bound by arbitrage rules that limit both the purpose of bond proceeds and the returns that can be generated from them.
The comptroller also raised concerns that the speculative nature of the proposal would undermine investor confidence in the city’s creditworthiness. “If we lose the trust of institutional buyers who rely on the integrity of our financial instruments, we compromise the city’s ability to borrow affordably,” Lander said.
Mayor Adams has yet to release specific legislative or financial details for how BitBonds would be implemented or regulated.
