Announcing that he will receive his next salary in November in Bitcoin, Miami Mayor Francis Suarez wants to be a pioneer in this regard by raising money for the city through the new cryptocurrency MiamiCoin.
According to Republican Mayor Suarez, who spoke to the BBC, MiamiCoin, which he launched experimentally this year, may one day stop residents from paying council taxes.
Suarez also hopes that in the future, a share of MiamiCoin’s digital profits will be distributed to every Miami resident.
But MiamiCoin is just one part of Suarez’s idea to turn the city into a cryptocurrency hub alongside sea, sun and Cuban coffee.
“I believe we are presented with a very unique opportunity to diversify our economy,” he says.
“Before the pandemic, more than 60 percent of Miami’s economy was service-based. This has made us particularly vulnerable to Covid-19 and I will not refuse my chance to change that”.
New York is not down
It should be noted that Suarez is not the only mayor in the US crypto-capital race.
Eric Adams, who plans to take over the mayor of New York next month, is also very enthusiastic about it.
Democrat Adams has previously pledged to make New York a crypto hub.
He mentioned that those working in the city can receive a salary in cryptocurrency and that they can be paid in the same way in New York schools.
After Suarez announced on Twitter that he will receive his next salary in 100 percent Bitcoin, Adams said, “We always play big in New York, so when I become president, I will get my first THREE salary in Bitcoin. New York will also be the center of the cryptocurrency industry and other fast-growing innovative industries. Just wait,” he replied.
The cryptocurrency Adams supports for his city is NYCCoin.
What are cryptocurrencies?
The meaning of cryptocurrencies created or “issued” by computers with complex software programs, without the support of any central bank or payment system, depends on who you ask.
Seen by some as revolutionizing the global economy, overcoming national governments’ control over finance and putting that power in the hands of ordinary citizens.
On the other hand, it can be considered as a risky and unstable tool that enables illegal activities from ransomware to drug trafficking.
Anyone with the time and money to install the necessary computer equipment can mine as well as set up their own cryptocurrency.
The best known and most popular cryptocurrency was Bitcoin. It has been so volatile over the years that it has made some people lose their fortunes.
However, many other cryptocurrencies were created afterward.
Both cities are serious.
Both mayors are serious about making their cities a hub for cryptocurrency.
In June, Suarez hosted a Bitcoin conference in Miami that hosted nearly 12,000 people, including bankers, tech executives, and crypto entrepreneurs.
The next one is already scheduled for April 2022.
Adopting the idea of a city-based cryptocurrency like MiamiCoin or NYCCoin demonstrates commitment to this industry.
Anyone can create, i.e. “mine” MiamiCoins.
In doing so, a portion of the mining revenues goes directly to the person making it. The rest goes to a nonprofit venture called CityCoins.
CityCoins gives 30 percent of the MiamiCoin produced to the city of Miami, while 70 percent is distributed to all MiamiCoin holders.
According to CityCoins, MiamiCoin, which was launched in August, has brought in over $20 million to the city and approximately 3,500 people involved in the mining process.
It’s worth noting that MiamiCoin itself is not money, says Dara Tarkowski, a finance attorney at Actuate Law in Miami and Chicago:
“It works more like a security that has to be traded and then cashed at some point.”
“The natural value is entirely based on supply and demand,” Tarkowski says.
Suarez says some of the MiamiCoins are in the process of being converted to dollars for the first time.
Meanwhile, cryptocurrency miners have already earned more than $25 million on NYCCoin.
What is the situation in other cities?
Cities outside of New York and Miami are following this experiment for now.
Besides being unstable, cryptocurrencies also have other risks such as fraud.
It is not yet clear which rules can be applied to this newly developing investment sector.
John Reed Stark, cybersecurity adviser to the United States Securities and Exchange Commission (SEC), thinks crypto mayors may be on the decline:
“Whatever they do with the crypto will crash, burn, and end in disaster. What they will soon realize will be ‘the king is naked’.”
Politicians from different political wings have also previously called for stricter regulations on cryptocurrencies.
President Suarez says he is aware of the risks, but they are taking due care.