Miami already has a lot going for it: sunlight, beaches, and Cuban coffee, to name a few. Now, the city’s mayor, Francis Suarez, wants to make it famous for another reason: he wants to be the first to invent a new mechanism for the city to raise funds – through a new cryptocurrency.
Miami is banking on cryptocurrency
According to the Republican, MiamiCoin, an experiment he initiated this year, might generate so much revenue that “Miamiians would no longer need to pay municipal taxes” in the future. That is one goal; beyond that, he intends to be able to distribute MiamiCoin to every resident as a digital dividend one day. MiamiCoin is just one aspect of Mr. Suarez’s plan to turn Miami into a cryptocurrency hub.
“I believe we’ve been presented a very unique opportunity to diversify our economy,” he said. “Prior to the pandemic, over 60% of Miami’s economy was service sector-based. That left us particularly vulnerable to Covid and I won’t pass on the chance to change that.”
While Mr. Suarez is the first out of the gate, he is not the only mayor vying for the title of crypto-capital of the United States. Eric Adams, the man set to take over as mayor of New York next month, is hot on his heels.
Mr. Adams, a Democrat, has promised to make New York a crypto-hub when he takes office in January. He has suggested that city employees be compensated in cryptocurrencies and that cryptocurrency teachings be taught in New York schools.
Mr. Suarez’s first paycheque had been requested in Bitcoin, so the New Yorker demanded the same for his first three months’ pay. Mr. Adams is a supporter of NYCCoin, his city’s cryptocurrency.
While some of the competitiveness may be based on putting out signals, both mayors are serious about making their city a cryptocurrency business hub. Mr. Suarez held a Bitcoin conference in Miami in June, which drew over 12,000 attendees, including bankers, tech executives, and crypto-entrepreneurs. The date for the next one has already been set for April 2022.
Another method to demonstrate dedication to the industry is to support the concept of a city-based crypto-token, such as MiamiCoin or NYCCoin.MiamiCoin can be mined by anyone. When this is done, a portion of the mining profits goes directly to the miner. The remainder is donated to CityCoins, a nonprofit organization that underpins the city coins.
CityCoins sends 30% of the MiamiCoin generated to the City of Miami via an automated method, while the remaining 70% is divided to all MiamiCoin holders. According to CityCoins, MiamiCoin, which began in August, has earned over $20 million for the city, with roughly 3,500 people participating in the mining process.
Despite its name, Dara Tarkowski, a financial lawyer with Actuate Law in Miami and Chicago, emphasizes that MiamiCoin is not money. “It’s more like the security that needs to be exchanged and eventually paid out. Its fundamental value is solely determined by supply and demand,” Ms. Tarkowski explained. The tokens only have worth when they’re cashed out, and we never know what that will be like, just like a stock.”
None of the MiamiCoin that has already been created has yet been converted into spending money for the city, however, Mr. Suarez claims that they are in the process of doing so.
For the time being, other cities are watching to see how this internet fund-raising experiment goes. And there are differing viewpoints. Aside from their volatility, cryptocurrencies carry a slew of other dangers. They have a lengthy history of being linked to illegal behavior ranging from ransomware to drugs, as well as various bitcoin scams.
Regulators are still figuring out what standards to put on a still-developing investment sector. The crypto-mayors, according to John Reed Stark, a cybersecurity expert with extensive experience at America’s top financial regulator, the Securities and Exchange Commission (SEC), as well as in academia, are on the verge of collapsing.
According to Mr. Reed, the SEC is paying close attention to Bitcoin activity for good reason. Accepting cryptocurrency, in his opinion, is “equivalent to trafficking in blood diamonds”. From Democratic Senator Elizabeth Warren to Republican former President Donald Trump, officials across the political spectrum have urged for more regulation.
Mr. Suarez acknowledged the dangers but insisted that his administration had exhausted all channels of due diligence. Outsiders are complimenting the mayors’ willingness to try new things. “Many municipalities make a wide range of investments in a variety of assets. Some of them put millions of dollars into real estate, while others put their money into bonds “Ms. Tarkowski stated.
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