Miami is quickly becoming the crypto capital of the United States. In August of this year, the Magic City was the first state in the U.S. to launch MiamiCoin (MIA), its very own cryptocurrency used for civic engagement. A few months later, Mayor Francis Suarez announced that every Miami resident with a digital wallet will be eligible to receive a Bitcoin dividend.
While such a proposal would make Miami the first city in America to provide a Bitcoin (BTC) yield to its residents, Mayor Suarez told Cointelegraph that the City of Miami does not actually own or hold MiamiCoin, or any cryptocurrency for that matter.
According to Suarez, CityCoins is an independent community acting in its own capacity. “CityCoins launched MiamiCoin as a way for citizens to engage more intimately with their cities and their governments,” said Suarez. He further remarked that part of CityCoins’ mission is to build up the cities they aim to support by gifting 30% of all mining rewards to their namesake city.
Since rewards are distributed in cryptocurrency, CityCoins acts as a custodian of Miami’s rewards until they are converted into dollars and formally gifted to the City. Suarez explained:
“The reason Miami residents will be able to earn dividends in Bitcoin is because prior to the City receiving the cash gift from CityCoins, CityCoins can reinvest the rewards from MiamiCoin and earn a yield in Bitcoin. It is my intention that Miamians receive every cent of that yield. A community that invests in its city deserves to have that money reinvested back into the community.”
Patrick Stanley, community lead of CityCoins, further told Cointelegraph that since mining began for MiamiCoin on Aug. 4, Miami has generated over $22 million dollars. More importantly, Stanley pointed out that this amount is denominated in Stacks’ STX token. This is the case since CityCoins is a project built on Stacks, which is an open-source network of decentralized applications and smart contracts built adjacent to the Bitcoin blockchain.
According to Stanley, STX is yielding a 10% annual percentage yield in Bitcoin. Given this, he believes that in the next five to 10 years, every Miami resident could receive a couple hundred or even thousands of dollars per year in BTC if this approach continues. Stanley elaborated:
“The City of Miami will experiment with the BTC generated from their treasury to give their citizens USD. This is very powerful, as Mayor Suarez essentially activated all citizens to become supporters of the MiamiCoin protocol, which will also allow people to mint NFTs, build applications, and provide for crypto payments.”
Given the potential of MiamiCoin, Suarez remarked that he aims to allow every Miami resident the opportunity to partake in the crypto and blockchain movement. Stanley added that over $150,000 worth of art has been minted using MiamiCoin and that the protocol can also fuel smart contracts.
CityCoins adoption timeline remains unclear
While MiamiCoin appears to be thriving, Suarez shared that he is fully aware of the legal hurdles and complexities that may arise from community adoption. “There’s no way to know how quickly we can make this into a reality,” he said.
Even though this is the case, it’s become clear that other innovative U.S. cities plan to follow Miami’s lead for implementing a CityCoin. Most recently New York City launched “NewYorkCityCoin” (NYCCoin), which occurred shortly after Mayor-elect Eric Adams stated that he wanted to turn New York into a crypto-friendly city. Stanley noted that a New York CityCoin was then voted on by the community once Adams mentioned the idea. “New York leapfrogged San Francisco because Mayor-elect Eric Adams was outspoken about the initiative,” explained Stanley.
Yet actions may speak louder than words in the case of CityCoins’ success rate. For instance, a Cointelegraph article recently pointed out that New Yorkers are unable to legally mine NYCCoin because residents have no compliant way of purchasing STX tokens. This is the case since the coin isn’t available on any exchange holding a BitLicense, which is required for residents purchasing crypto in New York City.
Interestingly enough, at the time of writing, over $7 million has been generated from mining NYCCoin since mining began on Nov. 11. Yet Stanley noted that one doesn’t need to be a resident of the city that CityCoin represents in order to mine it:
“MiamiCoin is an open-membership protocol. You only need a web wallet and to choose the CityCoin you wish to mine and then forward over the Stack’s payment.”
Stanley added that an Austin CityCoin may be next, given Austin Mayor Steve Adler’s interest in cryptocurrency.
Crypto education a driving factor for CityCoin adoption
Challenges aside, it’s important to point out that crypto education may be a driving factor for cities wishing to adopt CityCoins. For example, Adams recently mentioned that he wants crypto education taught in New York City schools.
Echoing Adams, Suarez explained that Miami has identified the need for a more comprehensive educational curriculum in order to prepare students for the next generation of technology and finance:
“We’re already exploring the expansion of Miami’s charter school network in an effort to deliver this more industry-tailored education. The City of Miami currently has $20 million reserved in its designated wallet and we are expecting to receive $4 million–$5 million sometime this week. We have a lot of ideas for how we can spend the money, and we fully intend to listen to the community’s input as to how to deploy the funds.”
While the idea of crypto education is on the horizon for both New York City and Miami, Suarez added that a six-month freeze has been placed on spending any MiamiCoin funds in order to best assess community needs. “We’re already speaking to a number of leaders in the Bitcoin community to explore wallet options and technologies like Lightning — we’re going to take our time making sure we get the technology and education pieces right,” he said.