Last year, Miami became the first city to launch its own cryptocurrency — MiamiCoin, or MIA. With New York and Austin following suit to launch their own CityCoins, cryptocurrency has the potential to change the future of public interaction with cities and their corresponding governmental bodies.

Since its launch in August 2021, MiamiCoin has earned more than $21 million for the city. Miami Mayor Francis Suarez told Fox Business that he hopes cryptocurrency will make Miami an innovation-forward city and contribute to the city’s tech ecosystem.

“We’re focusing on differentiating our economy by creating the new wave of technological products that will incentivize people to move to Miami and be part of our tech ecosystem,” Suarez said.

MiamiCoin

Miami’s new cryptocurrency has the potential to transform financial relationships, raise revenues and bring long-term benefits to thousands of residents. 

MiamiCoin is powered by the Stacks Protocol—a protocol that enables smart contracts on the Bitcoin network—through the nonprofit organization CityCoins. It provides an ongoing revenue stream for both the city and MIA holders. 

Rewards of mining the coin are divided: 70% of rewards are distributed to people who choose to stake their CityCoins, while 30% go to Miami’s reserve wallet. It also includes an app called MiamiVoice to enable residents to give public feedback about its use. In November 2021, Suarez announced that every Miami resident with a digital wallet would be eligible to receive a Bitcoin dividend from the yield of MiamiCoin.

The city of Miami can choose to employ its growing treasury in several ways: public spaces, new infrastructure, city events, and so on. But how these funds will be allocated is yet to be determined. In an interview with FoxBusiness, Suarez noted that alleviating homelessness, increasing policing and improving residents’ quality of life are some of his main priorities. He also mentioned that if MiamiCoin continues to increase in price, residents may not have to pay taxes in the future. 

Yet his final decisions will depend upon the voices of residents and investors.

Community Money

MiamiCoin is different from other digital currencies: it is not just a cryptocurrency, but also a decentralized application that can function as a developer platform for cities. Because it is directly funded by people, it poses new possibilities for civic engagement and public opinion. 

According to a presentation given at the North American Bitcoin Conference 2022 by CityCoins Community Lead Andre Serrano, CityCoins can “unlock a city’s cultural value while providing new opportunities for creators.” MiamiCoin can become an important vehicle for donations, where people can support public projects or initiatives through the coin.

Serrano added that they have the potential to “transform how people interact with their cities” by aligning incentives between local governments and city residents. Because CityCoins are programmable, smart contracts or applications can directly be developed around the tokens. For instance, Serrano said city officials could introduce discounts for residents for using public transportation or shopping locally. 

Notably, there are risks as investors or entities that hold large shares of the coin could exert influence on its utility, and there are additional questions about the coin’s regulation or taxation, including whether the coin can be classified as a currency, security, commodity or asset. 

In any case, it could change the future of cities and cryptocurrency.

ABOUT THE WRITER

Freya Savla is a Tech Innovation Fellow from Yale University, where she is exploring the political economy through the lens of economics, policy and journalism.

Contact Freya at freya@identityreview.com.

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