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Miami implemented MiamiCoin cryptocurrency a few months ago, but the real news came late last week when the city’s charismatic mayor, Francis Suarez, announced that the yield from MiamiCoin would be redistributed to its citizens. This sounds ground-breaking, but is the mayor a true visionary, or is he just a part of creative PR stunt? 

Let’s take a closer look:

MiamiCoin launched in August through CityCoins, an open-source protocol that allocates 30% of its reward to cites when their coins are bought or mined. So far, The cryptocurrency has generated over $21 million in the past three months for the city. If annualized, it would amount to roughly $80 million, which is already one-fifth of the city's total annual tax revenue of $400 million, Mayor Suarez said.

Miami will share with its residents some of the gains from the city's new cryptocurrency and will distribute payments through digital wallets, but while Suarez called the payment a "Bitcoin yield," the dividend will come from staking MiamiCoin, a separate digital currency.

The high income from the mining and staking, is related to the attractiveness of the coin and also the current discrepancy between the market interest rate and the interest income from staking the coin. It will be interesting to see if MiamiCoin will continue to generate the same level (or greater) of income for the city as it did the first three months of operation. If so, it may be an interesting alternative to bank deposits for Miamians. More importantly, this may be a strong message to traditional banks – figure out alternative model to the current deposit system or potentially face the loss of savings revenue in cities that implement similar concepts.

For implementing the plan, Miami will have to create crypto wallets to all [eligible] Miami residents based on eligibility criteria the city sets. This is novel considering that it will make the concept of cryptocurrencies and the practice of interacting with the crypto economy more of a mainstream activity (in Miami). People who otherwise may not have been comfortable directly holding cryptocurrencies may be more receptive and more knowledgeable. This move may also inspire more innovation in the areas of UX/UI within the crypto ecosystem – something that it has lacked since its inception.

Miami Eyes Crypto as a Defining City Feature

It’s clear that along with Mayor Suarez’s goals of supporting city residents without taxes – becoming a creative funding source for the city – he also wants to put the stake in the ground that Miami is the King of Crypto. Crypto and Bitcoin are not new to the city. Miami has a long history with crypto and Bitcoin, including hosting the annual Bitcoin conference. The Mayor has also stated multiple times that he wants to turn Miami into the most crypto-friendly U.S. city – proclaiming that he’ll receive his next salary in Bitcoin.

While New York is known as the Big Apple and Chicago is still the city of Big Shoulders, will Miami be forever referred to the city of Big Coin? We certainly can’t make any determinations at this point, but Miami’s move may be a part of a larger trend with municipalities turning to alternative funding sources in an evolving digital economy.