New York City and State have been the economic engine of the nation and the global financial sector for generations because of our unrelenting drive, entrepreneurialism and enthusiastic embrace of innovators. Our eagerness to lead the world has made New York the greatest hub of economic activity since the industrial revolution. We are also a city and state committed to funding and supporting there New Yorkers—the model of modern capitalism.
We often hear that New York is “unfriendly to business.” But it’s reasonable that we demand businesses and industries that want to operate in our state support New Yorkers also invest in education and social programs, provide robust benefits, embrace unions and adhere to the highest consumer and environmental protection standards in the nation. We do not make it easy because it should not be easy.
This balance has been held for generations, during booms and busts, because policymakers could craft and adapt regulations in a deliberate and thoughtful manner over years, and even decades, as fledgling industries matured.
Today, the rapid pace of change and innovation in the Web3 economy threatens to upend that balance.
Setting aside the recent down cycle (some might even call it a crash) in the markets, Web3 technologies — which includes things like crypto, new approaches to user-controlled privacy, and expanding access to financial tools — will be the basis for the next generations of technological innovations. Much of the early growth is happening in the financial sector, but its promises lay well beyond, and its supporters — myself included — envision a connected future where individuals retain control and ownership over their online lives, their personal information and their economic futures. By its very nature, technically and culturally, Web3 is decentralized. It can happen anywhere and everywhere.
New York City already has some advantages as a hub for businesses in this ecosystem. A substantial number of innovators and investors — some of the earliest pioneers in the Web3 movement — have built their companies and made their investments in our city. Indeed, New York was the top overall global market for crypto investment in 2021. New York-based crypto startups raised $6.5 billion in 2021, representing almost half of all private cryptocurrency and blockchain investments. And our current mayor’s support has only helped reinforce this.
Critically, however, Web3 opportunities extend well beyond the five boroughs. In fact, we face a rare opportunity to foster the kind of economic growth usually only seen in Manhattan and Brooklyn throughout New York State, particularly upstate. This is true because of some unique attributes including New York’s abundance of low-cost renewable energy, underutilized industrial facilities and our unparalleled higher education and research institutions. It goes without saying that decades of politicians have decried upstate population and job losses at the hands of deindustrialization and the globalization of the economy. Now, the winds powering the next iteration of the global economy are for the first time in a long time strongly blowing toward upstate New York.
We have a generational opportunity to harness this global transformation for the economic benefit of the entire state and have this economic revolution lift up all of New York State, not just the affluent.
Other states see this. California, hardly a bastion of pro-corporate, anti-environmental regulation, just this week announced it is moving in exactly the right direction, with Gov. Gavin Newsom releasing an executive order that promises to work closely with Web3 stakeholders to streamline regulatory processes, create transparency, and encourages the state to use technology on the Blockchain to make state government work better for Californians.
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In stark opposition, New York State legislators are moving quickly to put a halt to this growth with what they present as a temporary ban on proof-of-work crypto mining in certain power plants. To be sure, there are some legitimate concerns about the environmental impacts. But this bill targets only the crypto industry, instead of focusing on what the underlying environmental concern really is: the use of decommissioned power plants. These concerns, in fact, have nothing to do with Web3. Any industry with electrical needs is the real target. By targeting a single industry, lawmakers are sending a clear message to the entire global financial ecosystem to stay away from investing in New York.
Some would argue to take the approach of Florida or Texas and throw open our doors, slash taxes and regulations, and let down our guard. Others argue that we should slam on the brakes and stop innovators from planting their roots in New York for years while we craft new regulations.
Neither is the New York way.
Let’s learn from our recent mistakes. The plans for Amazon HQ2 held the promise of creating tens of thousands of middle-class jobs and driving economic benefits to a wide array of large and small businesses, especially in Queens, but throughout the five boroughs. When the plans were blocked, Amazon’s investment and jobs went to Virginia, but the company’s top-tier executives still came to the city and leased existing Manhattan office space and we were left with less downstream economic benefit.
New York would be best served by harnessing our embrace of diverse entrepreneurs and eagerness for job growth statewide while maintaining our true progressive values with a thorough review of the impact of blockchain technology and digital assets more holistically
True progressives who care about environmental and consumer protection should be enthusiastically welcoming the crypto explosion to New York because this is an industry in critical need of oversight and regulation. What better melting pot than New York to shape this industry and once again set the standard for the world?
Samuels is the founder of Tech:NYC, a tech investor and an entrepreneur.