It took just 30 days for the MiamiCoin project to generate $4.3 million in contributions to the city of Miami.
On Monday, city commissioners voted to accept the MiamiCoin-linked funds — which continue to grow — but will hold off on spending them, for now.
MiamiCoin is a new cryptocurrency launched in August by crypto developer CityCoins Inc., which hopes to generate interest in a city’s municipal projects.
But CityCoins does not own MiamiCoin. Instead, like moist cryptocurrencies, MiamiCoin ownership is decentralized. Like Bitcoin, it is created through a technical process involving computers “mining” the coin by solving complex equations.
When a MiamiCoin is successfully mined, 30% of the “reward” for doing so is deposited as a contribution into a virtual wallet earmarked for Miami. It is access to that wallet that the commissioners approved Monday.
The value of the MiamiCoins in the city’s wallet are determined by the value of another cryptocurrency, called Stacks. One Stacks is currently worth $1.50 — and with more than three million Stacks committed to the city of Miami’s designated wallet, Miami now has access to funds worth some $4.5 million, and counting. The city will only accept the funds as U.S. dollars as part of its agreement to access them in order to avoid being in direct custody of a cryptocurrency.
Anyone can access MiamiCoins through mining them, or through buying them on an exchange, though currently just one, Okcoin.com, is selling them.
In an interview, Miami Mayor Francis Suarez hailed the decision to accept the funds.
“The fact that CityCoins has chosen to do a MiamiCoin is an indication of how Miami is viewed in the crypto community,” Suarez said in an interview. “The fact that it gives 30% of mining proceeds to the city could create significant benefits, and has already created approximately $4 million in 30 days.”
In an abundance of caution, Suarez said, the city is not yet going to spend the funds.
“We’re going to have conversations with the commission as more money is generated of what is the most effective means of using those funds,” Suarez said. “It’s a very very new technology, we want to be safe, we’ve done significant due diligence, but we want to be abundantly careful.”
Suarez noted the city is not endorsing MiamiCoin, and MiamiCoin will not be able to use the city’s logo. Still, Monday’s vote is part of a broader effort to continue to market the city as a hub for tech — and cryptocurrency in particular.
“The city has further established itself as a leader in the public sector by accepting their MiamiCoin protocol contributions, demonstrating how municipal governments can adopt and take advantage of new technologies to benefit their constituents,” CityCoins said in a statement on its website.
Among the uses Miami commissioners have initially proposed for the funds: programs to mitigate climate change, funding new initiatives for underprivileged communities, and crypto education and incentives for tech entrepreneurs.
A $4 million infusion may seem like a drop in the bucket, but the revenue losses during the COVID-19 pandemic illustrate how millions can make a difference in tough times. The city of Miami is currently considering a $1.3 billion spending plan for the upcoming budget year, which begins Oct. 1.
Before administrators realized last fall that they had funds to plug most of a roughly $30 million budget hole, Miami approved a budget that forced layoffs of police and firefighters and made cuts to some city services. The cuts were reversed after administrators realized they had more in city coffers than they’d initially thought.
This year, Miami’s budget is bolstered by an infusion of about $137.6 million in federal aid from the American Rescue Plan Act.
CityCoins said on its website that the MiamiCoin funds are only the most immediate use for MiamiCoins.
“One of the main benefits of MiamiCoin are the decentralized applications that can be built on top of this programmable token, by and for the community,” it said. “There are currently over a hundred developers already building applications using MiamiCoin’s open-source protocol for the ongoing MiamiCoin Makers Month hackathon.
“With Miami poised to take full advantage of their protocol contributions, city officials across the globe have on opportunity to activate their own CityCoins and unlock new resources to benefit their city,” it said.
CityCoins creator Patrick Stanley said simply owning MiamiCoin creates value for the city of Miami, since increased demand for them will cause more to be created and more funds to be generated.
“The more the open protocol gets built with, the more city of Miami earns as a function, which benefits all Miami citizens,” he said.