Bitcoin is not the official currency of Miami — at least not yet.
But late Thursday, Mayor Francis Suarez submitted a resolution authorizing the city to begin researching the possibility of accepting donations from a new cryptocurrency project that aims to support cities like Miami.
The CityCoin initiative wants to raise funds for municipalities by generating demand for city-specific digital tokens. Because state and federal statutes forbid the city from accepting or holding any currency besides U.S. dollars, the funds would be turned over to the city as cash. Those statutes also mean CityCoin is not about to become the city’s official currency anytime soon.
But given Miami’s newfound prominence in the tech and especially crypto worlds, CityCoin organizers decided it would be the first to get its own such token, aptly called MiamiCoin.
“The city’s leadership is embracing crypto and offering support for the tech industry as a whole,” CityCoin said in a July 14 post on its website. “Mayor Suarez has expressed excitement for MiamiCoin and his enthusiasm is a testament to Miami’s culture of disruption and constant evolution.”
CityCoin designers are earmarking 30% of the income generated from MiamiCoin activity to the city to be used however it wishes. MiamiCoin is slated to open for digital mining Aug. 3.
“We could use it for roads, parks, regional resilience — the idea is [MiamiCoin users] are making an investment in the quality of the city’s future,” said Michael Sarasti, Miami’s chief information officer and its director of innovation and technology. “They’re betting on Miami to be successful, and from a holder perspective, when Miami does better, their coin does better.”
If the city chooses to not accept the 30% earmark, Sarasti said, those funds would end up essentially wasted, because the CityCoin protocol dictates that percentage cannot be used for other purposes.
Though Suarez’s resolution passed unanimously Thursday, some city commissioners were skeptical about the idea that a company would funnel proceeds to a city without any strings attached.
CityCoin founder Patrick Stanley said in a statement that he understands that the idea of a piece of software automatically funneling an ongoing contribution to a city is novel and would naturally create confusion or misapprehension.
City Manager Art Noriega was instructed to do due diligence and research who the owners are of the company. Stanley previously served as head of growth for Stacks, the blockchain protocol that CityCoin uses. Cryptocurrency news group Coindesk has also reported that influential tech pundit Balaji Srinivasan is also playing a role in the CityCoin project.
“Is this something that is completely altruistic from a Delaware company?” asked Commissioner Alex Díaz de la Portilla.
“The idea is that if people make an investment in this coin, a portion of that money is going to help make cities better,” Sarasti said.
Sarasti said Miami would be the first city to have this type of arrangement with CityCoin.
City Attorney Victoria Méndez cautioned commissioners that even though they passed the resolution and it appears to be a straightforward donation, CityCoin’s potential use of the city logo and other legal ramifications could mean the commission would need to waive bidding or go through a formal procurement process to finalize the deal. A future commission vote might be necessary.