American cities build blockchain support
The Future. Cities like Miami and New York are looking to cryptocurrencies and the blockchain as a way to raise funds, attract businesses, and spur economic growth. As ambitious cities launch their own tokens, this could spur citizens to more directly engage in local issues that are voted on through the blockchain.
Municipal mayors are looking to crypto as a pathway to untapped revenue.
- Miami’s Francis Suarez and NYC’s Eric Adams are pledging their support by taking some of their salaries in Bitcoin.
- Miami launched MiamiCoin, a token that “raises money for the city while allowing its holders to earn mining and staking fees.” It has already raised $21 million.
- MiamiCoin was made in partnership with startup CityCoins. NYC has already tapped it to help develop its own token.
And in the wildest experiment yet, Wyoming has allowed a blockchain group, CityDAO, to build a city powered by Ethereum in the state. Token holders will have “access to a Discord, voting rights, and the ability to settle land after the ‘First & Founding Citizens.’”
Bit by bit
Why the sudden interest in crypto? COVID ravaged city revenues, leaving some major budget shortfalls — a loss in real estate activity left NYC with a $2 billion property tax deficit. Proprietary tokens could raise funds directly, and with a rapid increase in blockchain job listings, these cities could also use their tokens to attract crypto businesses — bringing both jobs and more taxable revenue.
However, a few existing laws could get in the way. In New York, you need a special license to do any business that falls under “Virtual Currency Business Activity.” That license, dubbed “BitLicense,” can take years and thousands of dollars to obtain. Since its launch in 2015, crypto activity has all but flatlined in New York. Can an enterprising mayor and the sway of public opinion rectify that?