Why New York City Needs Its Own Cryptocurrency

The case for making money local again

By Fouad Khan

Money used to be local. The first non-precious metal coins emerged as a natural consequence of trade, and were seldom accepted as currency outside the city-state on the Grecian coast that minted them. Then nation-states emerged and central banking was invented as an institution. Fiat currencies were deigned into circulation and the connection between money and place was mostly lost. Today, a dollar printed in West Point is the same dollar wherever it is found, whether it’s Dubuque or Dubai. It derives its value from the law of the United States and that law has no physical home. The United States of America, like all other countries, is a polygon on a map, a theoretical construct, a policy document.

As the dust settles on the haboob that cryptocurrencies have become over the last year or so and we try to find things of lasting value from the wreckage, we should keep in mind this missing piece of the puzzle: All resilient things start local. To find inherent value and stability digital currencies need to ground themselves somewhere. They need to go local. A theoretical construct is no longer enough. Digital currencies need something more tangible than just value by decree. They need a physical place where people can go and where the token will always be valued and the debts will always be paid. They need a city.

From the city’s perspective it makes perfect sense. Most cities struggle with securing the finances they need. Cities are taut systems operating at the edges of possibility, constantly optimizing the resources that are available to them. Consider New York, one of the richest cities in the world, with an economy larger than Mexico’s. Despite its wealth, it has attracted much negative recent attention for having a drastically underfunded public transport system. Something like $100 billion is needed to fix the New York subway, and nobody knows where that money is going to come from. Almost every city has a laundry list of essential projects that are in dire need of cash. Launching a digital currency for a city could…

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