Overview: Main Takeaways
- At the Bitcoin 2025 conference, New York City Mayor Eric Adams revealed plans to launch a Bitcoin-backed municipal bond (sometimes known as a Bitbond).
- This Bitbond model pays its bondholders with 1 percent interest per year over a 10-year period as well as a percentage of the increase in the price of Bitcoin.
- The proposal met a vehement opposition by the NYC Comptroller Brad Lander, who cautioned over the financial risks and investor confidence loss.
- Lander stated that he would prevent any debt issuance that was backed by crypto even during his term in office.
- It is proposed that 90 percent of the money would be used in government expenditure, and the remaining 10 percent will be held in Bitcoin controls, and many details are not understood.
- This discussion shows the conflict between the creative funding and the established protections of the public financing.
Introduction: What is the proposal of Bitbond?
New York City Mayor Eric Adams revealed a groundbreaking concept to issue a municipal bond in the form of a Bitcoin-based bond, the so-called “Bitbond” at the Bitcoin 2025 event in Las Vegas on May 28. Adams explained, “I think the city should have a Bitbond and that I will pressure and search to see that the city has a Bitbond,” and he means business about cryptocurrency in the city.
The Bitbond will enable investors to purchase nit bonds created by the city since there will be a guaranteed 1 percent rate of interest per annum over ten years. In addition to that, any increase in the value of Bitcoin would be enjoyed by the investors, an incentive that is unmatched by any other conventional bond.
How Does Bitbond Model Work?
As Bitcoin Policy Institute said, the proposed Bitbond would work as the following:
- Interest Rate: Bondholders receive interest rate of 1 percent on the annual basis within 10 years.
- Bitcoin Appreciation: Investors earn 100 percent of returns made by Bitcoin until the 4.5 percent compound gain per annum after the ten years period. Any increase above this amount would be divided 50/50 between the investors, and the government of the city.
- Funds Usage: 90 percent of revenues would go toward such government projects as infrastructure and affordable housing and the remainder would go to buy Bitcoin to build a strategic reserve.
The Hybrid Bond model will combine the municipal finance tradition with innovative digital assets to offer public finance and take advantage of the possible increase in the digital currency.
Resistance of NYC Comptroller Brad Lander
Nonetheless, not all people are this excited like Adams. The proposal drew sharp criticism by Brad Lander, City Comptroller and presumed political opponent in the November election.
Lander said May 29 in a statement that as a watchdog, he would not allow the city to issue the crypto-related debt instrument as long as he held office. He mentioned huge financial risks: Virtual assets such as Bitcoin are too varied to support essential parts of the infrastructure or social programs.
Lander added that such bond issue might destroy investor faith, making the city exposed to new risks and losing trust on the part of the buyers. His standpoint mentions a conservative vision of the new but unpredictable crypto-financial world.
The Larger Dialogue: Change vs. Consistency
The argument about the Bitbond is used to point to a greater question: what is an effective way to weigh innovation in the financial sector against safeguarding the sovereign assets of a city and investor faith?
Though Adam applauds the role of cryptocurrency in transforming how the city is funded, Lander points to trusted, stable, proven financial instruments to maintain basic municipal functions, including housing and schools, and infrastructure.
New York is not the only state in which this debate is taking place. Governments all over the world are struggling to find ways of integrating blockchain and cryptocurrencies in government finance responsibly.
What is Next in the Bitbond?
Facing a powerful opposition, Adams seems to be keen on the idea to continue with Bitbond as something that New York needs in future. In the meantime, Lander takes a firm stand which implies that the way of getting approval is going to be difficult, particularly because his office holds the power of issuing debt in the city.
This area of concern may be used as a major campaign slogan between the two leaders as the November election occurs, each having different visions of how New York would have to face the future when it comes to finances.