Other cities are going to great lengths to position themselves as so-called crypto capitals.
Miami and New York City are becoming go-to destinations for blockchain- and crypto-related conferences. Some public officials there and elsewhere are even accepting their paychecks in digital currencies, instead of US dollars. They’re exploring ways local governments can generate revenue via city-based cryptocurrency tokens.
And for what? To have a shot at becoming a Silicon Valley-like hub for the emerging technology. (Despite the recent crash, there would seem to be long-term value.)
Officials in Massachusetts, though, have taken a somewhat opposite approach. A spokesperson for Boston Mayor Michelle Wu confirmed she does not have any blockchain or crypto-related plans or initiatives “at this time.”
That’s despite the fact there are several leading companies based here, like Circle, Algorand, and Flipside Crypto. And last month, Fidelity said it would allow some people to invest up to 20 percent of their 401(k) savings in crypto (employers have to opt-in).
The move was hardly welcomed in Fidelity’s home state.
Senator Elizabeth Warren penned a letter to CEO Abigail Johnson, in which she said “investing in cryptocurrencies is a risky and speculative gamble,” expressing concern that Fidelity would “take these risks with millions of Americans’ retirement savings.” (A spokesperson for Fidelity said it “shares policymakers’ mission of protecting the best interests of retirement savers.”)
Of course, there is reason for local officials to refrain from outwardly supporting — or hyping up — cryptocurrencies.
Philadelphia backed off supporting a municipal cryptocurrency last month, citing its volatility, among other concerns. And the price of the “MiamiCoin,” a crypto token from CityCoins intended to fund city initiatives, is down 95 percent from its peak in September.
Still, some believe Massachusetts officials should do more to learn about the technology. State Representative Kate Lipper-Garabedian said blockchain tech is much broader than digital currency, and she wants her colleagues to better understand its potential.
“Other states, they’ve already moved forward with substantive laws that update their legal framework to incorporate cryptocurrency,” she said.
Lipper-Garabedian is advancing a bill to create a state blockchain and cryptocurrency commission, which would provide recommendations to the Legislature about “how to appropriately support the ecosystem,” she said.
Without government support, she said, Boston could miss its chance to become a blockchain hub, despite having “some of the natural resources that would be necessary to appropriately support this industry,” such as a thriving tech scene and esteemed universities.
“There’s been research that shows MIT produces maybe the highest number of blockchain technology graduates, but most of them don’t stay,” she said.
The research Lipper-Garabedian referenced suggests Boston’s blockchain ecosystem “has largely been created without state support or a meaningful regulatory framework.” That could lead to the “perception that Massachusetts is not friendly to the sector” and could explain why some local companies “are setting up offices in Miami,” the report found.
In terms of becoming a crypto capital, Lipper-Garabedian doesn’t “see Boston entirely being there” yet.
“We don’t make the headlines like Miami or New York,” she said. “But I know there are definitely people who are thinking about that.”