Several big US city mayors have gone silent on city-based cryptocurrencies, which they earlier supported as a solution to many of their towns’ challenges.
CityCoins, a Delaware-based business, has persuaded mayors in cities such as New York and Miami to launch city-branded blockchain initiatives. However, Miami’s crypto, named MiamiCoin, has encountered a snag: its value has dropped by about 95 percent since peaking in September, according to Quartz.
Miami paid out part of its MiamiCoin assets for the first time in February, a $5.25 million cash injection that mayor Francis Suarez described as a “historic event for our city.”
Last year, Suarez went so far as to predict that MiamiCoin may soon replace municipal taxes altogether, allowing the administration to function solely on its crypto assets. However, that fantasy appears to be fading as the token’s value falls.
NYCCoin, the Big Apple’s comparable initiative from CityCoins, was previously welcomed by now-mayor Eric Adams as a method to “push our city forward.” According to Quartz, the coin has dropped 68 percent since Adams took office on January 1, and the scandal-plagued mayor hasn’t addressed NYCCoin since.
Philadelphia, perhaps, made the smarter decision by abandoning ambitions to issue its own coin. According to Quartz, CityCoins such as MiamiCoin are solely speculative assets that cannot be used to exchange goods or services. It, like most other cryptocurrencies, is a highly volatile asset that investors mine and trade.
There is good news. According to the Miami Herald, the proceeds from the February auction may go to a good cause, offering rental help to low-income people.
However, given the coin’s dropping value, future profits are far from assured. Mining the coin is also extremely tough, with investors needing to put up hundreds of dollars to increase their chances of winning a raffle. The prize: the next block of the MiamiCoin blockchain, with the city receiving 30% of the proceeds.
Critics contend that the effort consumes far too many city resources. Furthermore, CityCoins’ tokens, like all other cryptocurrencies, operate in a regulatory vacuum, with federal agencies closely monitoring the startup’s operations, according to Quartz. Nobody knows where this leaves MiamiCoin’s future. Suarez, for one, isn’t so sure.
“I’m not sure if it’s going to work,” the mayor told the Miami Herald in February. “Innovation is not always successful.”