Miami Mayor Francis Suarez and New York City Mayor Eric Adams both have several things in common when it come to the business of crypto: They both want their city to be capital of cryptocurrency world.
They both took paychecks in bitcoin to prove their sincerity.
And they both backed a CityCoin named for and benefiting their city: MiamiCoin, which launched last August at about five cents, is down 98% to $0.00071, and NYCCoin, which launched at about the same $0.05 but in February of this year, is only down 94%.
Which did the cities no actual harm, although the amount of income they’re getting from the tokens is down dramatically. But in Miami, it contributed as much as $15 million to the city’s coffers first.
Token investors, on the other hand, are not in such good shape. Which leads to the inevitable question, what is a CityCoin and what are they good for?
Related: Colorado Plans to Accept Crypto for Tax Payments by End of Summer
What Is It Good For?
To begin with, they’re good for the city they’re named for, which gets 30% of the revenue. And they’re good for CityCoins, the company behind the cryptocurrencies that “gives citizens and supporters the power to support, improve and program the ________.”
In Miami, that blank is “the magic city,” and in New York it reads “the city that never sleeps” on the CityCoins website. There’s also an AustinCoin, which ends rather lamely by filling out that last part with “Austin.”
In September, Suarez told CoinDesk that MiamiCoin has “been mainstreaming significantly faster than bitcoin,” even though it couldn’t be used to actually buy anything at the time. Which remains the case.
As for what they actually do, well, it’s not much. A leader of the project told Quartz in May the coins are intended to be usable for “local business transactions, facilitate software development, and even one day furnish a source of a universal basic income for residents.”
See also: Will This be Year Crypto Gets Mention in Banks’ 10-Ks?
The way it works is that city boosters or MiamiCoin and NYCCoin investors mine the tokens in much the same way bitcoin is mined. They earn block rewards for doing so, just like in bitcoin mining. But unlike the first cryptocurrency, 30% of those rewards are donated to the cities’ coffers.
The city provides marketing and gets crypto “street cred” as a forward-thinking place to build a digital asset or blockchain company.
Soon after being elected in November, Adams greeted the announcement that a NYCCoin would be launching soon by tweeting, “We’re glad to welcome you to the global home of Web3! We’re counting on tech and innovation to help drive our city forward.”
We're glad to welcome you to the global home of Web3! We're counting on tech and innovation to help drive our city forward. https://t.co/SY9pv1Ebct
— Eric Adams (@ericadamsfornyc) November 8, 2021
As for CityCoin, it gets a use for its own cryptocurrency, Stacks (STX), which is used to mine the CityCoins — which means that miners buy STX in order to mine MiamiCoin and NYCCoin.
And while STX is also down 89% from its all-time high of $3.61, it was in the green until April, and at $0.38, it is still well ahead of its launch price of $0.21.
The Mayors
Besides touting Miami as a crypto-friendly place, becoming the first city to launch a CityCoin also burnished Suarez’ own crypto cred.
In April, Suarez — who has his eyes set on higher office — opened Miami’s annual bitcoin conference by calling himself the “most bitcoin-friendly mayor on the planet,” and offered “a vision for bitcoin America 2024” — sounding, as Quartz noted, rather like someone dipping a toe in the presidential campaign pool.
On May 31, after the already hurting crypto market suffered an even more aggressive downturn, Suarez told CoinDesk that when it comes to MiamiCoin, “I don’t push anything. I talk about the facts.”
However, he also noted that $5 million of the money the city made by cashing out its earnings went to a program to support tenants whose rent had gone up more than 20%.
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