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According to Mayor Francis Suarez, MiamiCoin, a new programmable crypto-token, was released in August 2021 and has the potential to earn the city “millions of dollars.” This increased revenue might go toward a number of public services, such as homelessness response and policing.
CityCoins allows users to mine currencies to assist a city, with 30% of the proceeds going to the local government’s wallet. CityCoins’ first token, $MIA, is being rolled out in more cities around the United States and overseas, based on community demand.
“We’re optimistic that MiamiCoin will illustrate to other communities that adopting new technologies can accelerate local initiatives, improve civic infrastructure, and more,” said Patrick Stanley, inventor of CityCoins.
The city of Miami has not joined with CityCoins, but it recently passed a resolution directing the municipal manager to conduct due diligence before receiving funds raised through MiamiCoin.
According to Suarez, the idea might be part of the city’s efforts to “differentiate our economy” and establish Miami as a cryptocurrency hub.
How It Works
On the Pomp Podcast, Anthony Pompliano, Patrick Stanley, and Muneeb Ali, Founder of the Stacks protocol, recently collaborated to explain how it all works.
Stacks (STX), a system that enables smart contracts on the Bitcoin network, powers CityCoins. By sending $STX tokens to a CityCoins smart contract, coins like $MIA can be mined. MiamiCoin is the first cryptocurrency to be listed on Okcoin.
Miners send 30% of their STX to a special wallet earmarked for the city, which the mayor can claim if he wants. CityCoin holders who ‘stack’ their CityCoins receive the remaining 70% of STX. To collect STX rewards, CityCoin holders must lock their coins for a set period of time. Holders of STX can then use it to create Bitcoin rewards.
The wallet can be automatically changed to dollars and deposited into the general fund of a city.
Developers can construct applications based on CityCoins because they’re programmable.
While some mayors, such as Suarez and others, are beginning to investigate the role of cryptocurrencies in their communities’ economies, others will undoubtedly be wary of the unregulated nature and volatility of the technology, and will be hesitant to venture into uncharted territory for local government. Mayors may find themselves with little choice but to participate if initiatives like CityCoins take off in a big way — and that’s a huge if.
“Cities can embrace Bitcoin and crypto faster than countries,” Muneeb Ali said, “and big cities with billion-dollar budgets can start to run more like the private sector by diversifying their currency balances into Bitcoin.” Cities should experiment with cryptocurrency beyond Bitcoin holdings to engage citizens and incentivize local participation, similar to what we’re witnessing in Miami.”
“CityCoins like MiamiCoin provide a new feedback loop between cities and the people who live in them,” he continued. Citizens and city stakeholders can use CityCoins as a new mechanism to represent community sentiment on local policy by voting with city-based tokens through the markets.”
Cities that embrace cryptocurrencies will also have to balance energy consumption concerns with environmental responsibilities in the face of a climate crisis.
Stanley argues CityCoins are “environmentally benign” because Stacks recycles Bitcoin’s proof of work, which is the process’s most energy-intensive part.
CityCoins is “definitely a novel notion,” according to Ian McKenzie, an international blockchain advisor at legal firm Osborne Clarke.
“I’m not aware of another token that offers to provide benefits to a city in such a direct way,” he said. “Whether it’s significant or not remains to be seen — as with every new token, the question will be whether the crypto market and, more broadly, the relevant city people, recognize the value.” To bring real benefits to cities, especially those the size of Miami, there will clearly need to be a critical mass of participants.
“It’s not a tremendous stretch to envisage how this will help locals if there is a critical mass of players and cities find their coffers full of valuable tokens.”
“The value of STX looks to be pegged to Bitcoin, which, as we’ve seen recently, can be quite volatile, making it more difficult to understand and estimate the value of participation,” he added.
Many communities are seeking for new ways to improve revenue, especially in the aftermath of the pandemic.
The city of Berkeley in California is exploring the concept of “micro bonds”, a smaller-scale version of municipal bonds that would allow individuals to contribute much smaller amounts, with the scheme’s administration handled by blockchain.
To create new money, cities in North Texas are investigating alternatives to monetize their data and assets such as land, buildings, lights, and roads.
Transaction fees — which would traditionally go to PayPal, Apple Pay, Mastercard, and Visa — would be captured by the local payment network and redirected to local social and environmental projects.
NYC Coin is Next
In keeping with Mayor-Elect Eric Adams’ aim of transforming the Big Apple into a cryptocurrency hub, New York City is going to acquire its own digital token.
The coin is called NYCCoin, and it was created by CityCoins, a civic-minded community and open-source protocol that allows investors to support their city while also making money. It donates 30% of its prize to the city when purchased or mined.
The introduction of NYCCoin comes after the success of MiamiCoin, which has raised over $21.3 million to date.
This level of innovation is the next pillar in the information economy, which allows workers to live, work, and vote with their feet.
Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.