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Ay, Mami! MiamiCoin Loses Nearly All Its Value As FTX Failure Has Ripple Effects For Miami

Miami Mayor Francis Suarez has touted the beach city as an up-and-coming tech hub, especially since the 2020 covid lockdowns.. But did the Mayor, whose father was the first Cuban born mayor Miami, get a little bit too carried away in the altcoin madness?

In early 2021, Miami was being touted as a Bitcoin hub. After speaking at Bitcoin Conference that spring, Miami launched under Suarez’s watch a municipal token, MiamiCoin, touting it as potentially revolutionizing funding for the city. Although the Mayor once predicted MiamiCoin could displace municipal taxes as the main funding source, MiamiCoin is today effectively worthless.

The token’s value has dropped to about four-tenths of a cent, where it is sitting at $0.00047 today, a fall of over 88%, according to data from OKCoin, the only exchange supporting trading for MiamiCoins. 

The City of Miami sold its holdings of MiamiCoin way back in February, putting $5.25 million in city coffers. Before too long, however, reserve funds run the risk of running out in city-owned crypto wallets. The new cryptocurrency was styled as a way for the crypto-savvy to back up the Magic City, and possibly make a few cryptocurrencies in the process.  The Miami Herald quoted Suarez saying, “I have no idea whether or not it will work.”

On 6 October 2021, CityCoins external spokesperson, Kara Miley, sent an email October 6, 2021, obtained by Quartz, to the Chief of Staff of Mayor Suarez, alerting the Mayor he was creating problems when he promoted MiamiCoin on media appearances. 

“We need to get an hour with the Mayor for a comms training session on CityCoins and MiamiCoin. It’s great that he is doing press but he would greatly benefit from an hour session with Patrick on how to best communicate the project. There are a few regulatory wires the Mayor has tripped in recent interviews and it’s really important for the sustainability of the project that he is better prepared. We really care about the Mayor and his role in making MiamiCoin a success—it’s critical that we get time with him as soon as possible.”

MiamiCoin is built on Stacks, a second layer protocol leveraging Bitcoin’s security to run its own smart contract network. Miami has also allowed city workers to receive part of their salaries in Bitcoin. 

“A CityCoin is automatically generating revenue that can be pushed back into the city itself,” Patrick Stanley, a Los Angeles–based technologist who was part of Stacks’ core team until 2020 and is now CityCoins’ main representative, told Wired UK. The nonprofit is supported by crypto-mining communities Syvita Guild, Z1, DoubleUp, Freehold, and the Stacks Community.

Mayor Suarez has some skin in the overall crypto game, if not in MiamiCoin. He has taken his salary in Bitcoin. In fact, Suarez attended the World Economic Forum in Davos, representing Miami, reported AOL

“I will note, for the record, that it’s not my only salary,” he divulged. “It’s a different decision to take than if a person was deciding to take their salary in Bitcoin if it was the only source of income for them.”

Suarez, who sold Miami as the world’s cryptocurrency capital,  likes to focus on the utility of cryptos, highlighting a difference between protecting people from fraud and losses. “Government has had a tendency over time to try to protect people against losses, and you can’t protect people against losses,” said Suarez. 

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