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From New York to Williston, North Dakota, some municipalities are seeking to integrate crypto into their operations, in part to attract tech-savvy residents and businesses.

In November 2021, Miami Mayor Francis X. Suarez, tweeted he’d take his next paycheck in bitcoin. Shortly after that, Eric Adams, now mayor of New York, tweeted that he’d take his next three paychecks in bitcoin. Perhaps not to be outdone, Suarez then said he’d take all his salary in bitcoin.

It’s not just large urban areas that are embracing digital currencies. The city of Williston, North Dakota, — with a population of about 25,000 — hosts a digital currency machine at Williston Basin International Airport and is accepting cryptocurrency as payment for city utility bills. The mayor of Jackson, Tennessee, has proposed having the city mine bitcoin and pay salaries in cryptocurrency as well.

Municipalities are looking at how to integrate cryptocurrency into their operations more frequently over the past few years, said Alicia Antonetti-Tricker, principal and consultant to municipalities with accounting firm Crowe. One catalyst is a desire to attract tech-savvy residents and businesses that can drive innovation and job growth. Another goal, according to some cryptocurrency supporters, is to offer an alternative payment tool to reach more individuals, including unbanked or under-banked residents. 

As cities and other government entities consider cryptocurrency initiatives, they’ll need to navigate several challenges. One is a fluctuating regulatory environment. Seventeen states enacted legislation or adopted resolutions relating to cryptocurrency in the 2021 legislative session, according to the National Conference of State Legislatures, and 33 states and Puerto Rico had such legislation pending.

Some states already restrict virtual currency activities. New York, for instance, requires individuals or companies that engage in what it calls virtual currency business activity (VCBA) to obtain a bit license. VCBA encompasses, among other functions, receiving virtual currency for transmission or transmitting virtual currency; storing, holding, or maintaining custody or control of virtual currency on behalf of others; and buying and selling virtual currency as a customer business.

The laws were enacted to reduce the likelihood that some would use cryptocurrency for money laundering, said David Yermack, professor of finance and business transformation at New York University. Complying with the state’s current registration and disclosure requirements is “harder than getting a bank license,” he said.

City leaders also need to determine if they have the technology to accept cryptocurrency payments, whether through their own systems or by partnering with payment processing firms, Antonetti-Tricker said. Municipalities also need to know how they’ll record transactions within their financial management system, as not all can handle such transactions, she added.

The volatility of cryptocurrencies raises concerns as well. In the first month of 2022, bitcoin fell by nearly 25% in value, dropping from $47,686.81 to $38,483.13.

The significance of cryptocurrency’s volatility will vary depending on how a municipality plans to use it, Antonetti-Tricker said. Making it part of an investment strategy likely would be viewed as higher risk than accepting payments in cryptocurrencies, as the city can turn to a third-party cryptocurrency payment processor to exchange them for dollars. Williston, for example, has partnered with virtual payment merchant BitPay, with utility payments it accepts in cryptocurrency incurring a 1% fee – less than the 3% fee on payments it accepts in GooglePay, ApplePay, and PayPal, the city said in its announcement.

Some question how much a crypto-friendly stance will help cities. “I think its importance is greatly exaggerated,” Yermack said. He notes the mayors who’ve announced they’ll take their paychecks in cryptocurrency could simply take their salaries in dollars and then purchase cryptocurrency on their own. And until the technology used to accept cryptocurrency payments is more scalable, it’s unlikely to be widely used as part of cities’ payments functions, he added.

Initiatives to use cryptocurrency to help the unbanked or underbanked — say, by taking payments for services or taxes in cryptocurrency — also face questions. David Rothstein is senior principal with the Cities for Financial Empowerment Fund, which works to improve the financial stability of low- and moderate-income households. Many who are unbanked need to know their money is safe, stable, and can be easily accessed, he said. Cryptocurrency currently falls short in these areas.

That’s not to say cryptocurrency can’t play a role. “While it won’t be a solution for all unbanked or underbanked individuals, it’s another tool in the tool kit,” Antonetti-Tricker said. In particular, it may help individuals who lack the documentation required for traditional bank accounts, she added.

The volume of energy required to mine cryptocurrencies also seems to run counter to the sustainability goals set by some cities. According to a New York Times study, the process of creating Bitcoin consumes around 91 terawatt-hours of electricity annually, or more than the amount used by the 5.5 million citizens of Finland.

However, the regular financial system also consumes quantities of energy, Yermack said. And supporters note that cryptocurrency mining energy demands can spur the development of renewable energy resources or tap resources that are currently being wasted, such as surplus natural gas at oil and gas drilling sites.

Despite those potential costs, the civic leaders getting on the cryptocurrency bandwagon are seeing the opportunities the currency can provide. “Local government will lead the way in #Bitcoin adoption, and along with it, usher in a new industrial revolution with sustainable economies that will help close the wealth gap,” Jackson Mayor Scott Conger tweeted last year.

– Karen Kroll


Kroll, Karen. “These Local Governments Are Blazing the Trail for Cryptocurrency Adoption.” Smart Cities Dive, 2 Feb. 2022,