From Skepticism to Strategy: NYC Embraces Blockchain’s Civic Potential

The recent inaugural NYC Digital Asset Summit Roundtable, hosted by Mayor Eric Adams, focused on New York City’s strategy for engaging with the blockchain sector. Key participant Joshua Maddox stressed the importance of public-private collaboration for scaling Web3 adoption.

NYC Reopens Doors to Tokenization

When New York City, a global financial nerve center, convenes a discussion on digital assets, the world takes notice. The recent inaugural NYC Digital Asset Summit Roundtable, hosted by Mayor Eric Adams and Chief Technology Officer Matthew Fraser, aimed to chart a forward-looking strategy for the city’s engagement with the burgeoning blockchain sector. Among the key participants invited to share insights was Joshua Maddox, Chief Ecosystem and Partnerships Officer at COTI, a Layer 2 solution built on Ethereum.

Maddox highlighted the substantive nature of the discussions, moving beyond mere “hot air” to explore concrete applications and challenges. “There were some valuable insights being shared, encompassing everything from harnessing blockchain for civic projects to ensuring equitable access to digital finance,” Maddox noted, emphasizing the city’s renewed interest in blockchain’s potential.

A central theme, according to Maddox, was New York City’s decision to “reopen its doors to tokenization.” This marks a significant shift for a city that, historically, has approached digital assets with a degree of caution, often through a lens of strict regulatory enforcement.

In 2015, New York introduced the Bitlicense, which was criticized by many in the crypto industry for being overly restrictive and driving businesses out of the state. However, under Eric Adams, who became the city’s mayor in 2022, there has been a shift toward embracing digital assets. Just recently, the city launched the Digital Asset Advisory Council, comprising industry leaders, to help shape policies that attract investment and ensure responsible development within the fintech ecosystem.

Banks and Interoperable CBDCs

Meanwhile, Maddox further elaborated on the critical need for public-private collaboration to responsibly scale Web3 adoption. “This is something I think we’re going to see a lot more of in the coming years: Web3 companies working hand-in-hand with national and municipal governments to integrate blockchain-based technology into public systems,” he stated. This potential for government bodies to leverage blockchain for improved transparency, efficiency and public services represents a significant frontier for the technology.

While Maddox participated in the summit as an individual expert, his insights are deeply rooted in COTI’s mission to facilitate private and compliant blockchain infrastructure. For cities like New York, COTI aims to “support [the] governmental vision of onchain civic services by offering privacy-preserving solutions for tokenized assets and public records, ensuring sensitive data remains secure yet compliant.” This is particularly relevant given Mayor Adams’ reported interest in using blockchain for secure civic records like birth and death certificates.

Zooming out to a global scale, COTI’s Layer 2 solution is designed to enable confidential decentralized finance (DeFi), identity management and tokenization, as well as Central Bank Digital Currency (CBDC) applications – verticals where Maddox believes COTI can add substantial value. “By making it easier for developers to build applications with privacy – and compliance – at their core, we’re confident that COTI can play its part in catalyzing Web3 innovation worldwide,” Maddox affirmed.

Turning to CBDCs, something at which COTI has built a reputation, Maddox addressed why fears that these could upend the financial system are overblown. He stated:

“Critics’ concerns about disintermediation stem from the potential for central banks to directly issue CBDCs to consumers, bypassing commercial banks. However, well-designed CBDCs can foster collaboration by integrating banks into their ecosystem.”

Some of the roles banks can still play under well-designed CBDCs include managing wallets, acting as custodians, as well as providing lending and payment services layered on CBDC infrastructure. As previously reported by Bitcoin.com News, COTI has collaborated with the Israeli central bank and European Central Bank on the two institutions’ respective CBDC projects.

COTI’s work with the two central banks has largely focused on enabling banks to leverage blockchain’s efficiency while protecting client data. Maddox, meanwhile, asserts that making CBDC designs interoperable allows banks to innovate without losing their competitive edge.

“At COTI, we believe that CBDCs can enhance TradFi’s capabilities if shrewdly implemented, and that the key to delivering greater financial inclusion is through collaboration – not winner-takes-all competition,” Maddox added.

Still on the subject of CBDCs, the COTI executive offered some of his thoughts on why only a handful of countries have fully digital versions of their respective fiat currencies. According to Maddox, talk of CBDCs or implementing these often raise concerns about financial control and impacts on monetary policy, hence “leaders are naturally cautious.”

Maddox cited COTI’s collaboration with the Israeli central bank and ECB to illustrate why adoption of CBDCs has been slow.

“For example, our work with the European Central Bank’s Digital Euro and Israel’s Digital Shekel pilot has reiterated the extent to which central banks prioritize rigorous testing to build trust: they can’t move fast and break stuff, because when you’re building a network for processing trillions of dollars with real people’s hopes, dreams, and wellbeing underpinning the bits, nothing can go wrong,” the COTI executive explained.