Forget it Jake, It’s Miami
As much as man New York Mayor Eric Adams (Whose life’s mission appears to be to make Bill deBlasio look better) is big into crypto, Miami mayor Francis Suarez is an even bigger supporter of the dubious financial instrument, and Miami just got burned as a consequence:
On Feb. 2, the city of Miami cashed out its cryptocurrency MiamiCoin for the first time, depositing $5.25 million into city coffers. Miami mayor Francis Suarez hailed it as a “historic moment” and predicted the cryptocurrency could one day even replace municipal taxes as the government’s primary source of funding.
Currency is not an investment scheme, nor a source of revenue, it is a system of measuring value to allow for relatively smooth goods and services.
If you think that somehow there will be limitless profits from any form of currency, whether specie, paper money, or the Ponzi schemes like Bit Coin, you are ignoring basic realities of economics and finance.
Over the last nine months, however, MiamiCoin has lost nearly all of its value, falling about 95% from its September peak to just $0.0032 as of May 13. Its rapid descent has burned investors on the way down, muting the dreams of Miami’s city leaders, and possibly raising red flags for regulators now investigating cryptocurrency transactions.
MiamiCoin is the first in what CityCoins, a Delaware-based company with a mailing address in a Los Angeles strip mall, has promised will be a series of US city-branded cryptocurrencies. New York City mayor Eric Adams tweeted his approval of NYCCoin on Nov. 8, shortly after his election, welcoming CityCoins to “the global home of Web3” (Web3 is a crypto-optimist idea of a decentralized internet built on blockchains and cryptocurrencies). But Adams hasn’t spoken of NYCCoin since taking office on Jan. 1 of this year, and the coin has fallen 68% since then. Meanwhile, Philadelphia’s government has explored the CityCoins idea, but announced in April it would not proceed.
Miami has forged ahead, though. In October 2021, it signed a “gift agreement” with CityCoins, allowing Miami to receive proceeds from the coin. The city does not own or manage the cryptocurrency, however. (Suarez has caveated in public statements that the city is only a legal beneficiary.)
At the outset, the arrangement benefited both Suarez and CityCoins. CityCoins has needed the backing of big-city mayors as it promotes more cryptocurrencies. And Suarez, a rising Republican star with national electoral ambitions, has made it clear he believes MiamiCoin can burnish his own image as a pro-tech politician.
So far, MiamiCoin remains a purely speculative asset. Neither the city itself nor private merchants appear to accept the cryptocurrency in exchange for goods or services. CityCoins was able to point to one potential city project (proposed but not yet implemented) involving a city contractor that would use the cryptocurrency to reward residents for reporting incorrectly parked rideshare scooters to the city’s 311 phone service.
Instead, MiamiCoin has primarily served as a volatile asset that makes money for the city government based on its value among investors who mine and trade it on the crypto market.
In Florida, that reality may be sinking in. This February, as MiamiCoin’s price tanked to less than half of one cent, Suarez conceded to the Miami Herald that the project might fail. “Innovation doesn’t always work,” he told the newspaper. But Suarez still appears to believe in the power of cryptocurrencies to transform local government, touting “the impact this technology will have on democracy,” while speaking at a Miami tech conference on April 19.
Seriously, this sort of sh%$ is so transparently fraudulent that it buggers the mind.
Either Mayor Suarez is to stupid to be allowed to cut his own meat, or he has personal interests tied to the crypto-currency.
In either case, investigators should be so close to him that they share underwear.