The crypto-bounce mayors they so dreamed of never happened, researchers say

[ad_1]

More than a year after cryptocurrency markets collapsed, there is ample evidence that the economic benefits many mayors claimed digital currencies would bring to their cities has not held up, according to a new article. of researchers from the Brookings Institution.

While benchmark crypto assets like Bitcoin and Ethereum have recovered somewhat from their 2022 lows, many mayor-led initiatives involving cryptocurrencies have collapsed. MiamiCoin, the bespoke token that Mayor Francis Suarez once touted as a future source of municipal revenue, was delisted in March after losing more than 99% of its value. In Chicago, a universal basic income project for formerly incarcerated people was put in jeopardy last year after FTX – the crypto exchange funding it – declared bankruptcy and saw its founder, Sam Bankman-Fried, indicted. fraud and money laundering.

These and other episodes should be seen as hard lessons for mayors about promoting emerging technology as key to economic boom times, and why more deliberate and holistic approaches are needed, according to the Brookings article. .

The article was written by Tonantzin Carmona, a Brookings scholar who has warned against cities chasing their crypto dreams, and Brookings scholars Mark Muro and Sifan Liu, who study technology and economic development. .

“Despite the efforts of some state and local governments to attract crypto activity, few startups and associated jobs have been stable or sustainable,” they write. “[The] the most recent accounts suggest that in most cases, crypto-related business booms have left little in the way of long-term job gains or startups. Instead, in many cases, they have created disturbing pollution and energy costs, failed business projects, major losses for consumers and investors, and an epidemic of fraud that local law enforcement has had. hard to contain.

Even in financial and tech hubs, cryptocurrency-related jobs have never been an overwhelming trend — the industry has never accounted for more than 0.15% of all job openings, even on most dynamic markets. And the job losses extended far beyond the coin projects and exchanges that ended in disgrace – according to CoinDesk, nearly 30,000 crypto-related jobs have been lost since April 2022.

But there are lessons cities can learn from the shrinking crypto industry, the Brookings authors write. Any future effort hoping to take advantage of an emerging technology should be undertaken with a “pragmatic baseline review” of the technology’s inner workings and use cases, they write.

“As local leaders move beyond the crypto debacle, they should be asking themselves some tough questions about future emerging technology opportunities they encounter,” the document reads, urging leaders to take a hard look. how an emerging industry would fit into the existing local tech economy. and whether it will create a stable and sustainable labor market.

City leaders should also aim to focus these efforts on what the paper’s authors call an “innovation ecosystem” – the community of government agencies, higher education institutions, employers, workforce organizations and other entities that have a skin in a regional economy.

“The collapse of the crypto bubble in most, if not all, places should push local leaders toward other regional economic development strategies,” the document states. “It should also be seen as a useful caveat: not all emerging technologies are promising, no matter how hyped they are.”

[ad_2]