Miami will soon become the first city in the United States to give its residents some of the gains from its new cryptocurrency, Mayor Francis Suarez said Thursday.
“We’re going to be the first city in America to give a bitcoin yield as a dividend directly to its residents,” Suarez said.
The yield will come from the city’s staking in MiamiCoin, which launched in August through CityCoins, and is marketed as a way for “people to support the Magic City and grow its crypto treasury while earning STX and BTC for themselves.”
CityCoins are powered by Stacks, a protocol that enables smart contracts on the Bitcoin network. The protocol allocates 30 percent of the reward that miners forward in order to compete in the earning of MiamiCoin to the city. The city of Miami may decide at any time to claim the wallet’s funds.
The cryptocurrency has generated over $22 million for the city since its launch. Suarez said Thursday that it’s possible that if it continues to perform it could cover Miami’s entire tax revenue.
If annualized, it would amount to roughly $80 million, which would equal one-fifth of the city’s total annual tax revenue of $400 million, the mayor said.
“You could theoretically at one point pay the entire tax revenue of the city and the city could be a city that runs without taxes, which I think would be revolutionary,” Suarez said, adding that the city will be working with numerous cryptocurrency exchanges to allows residents to acquire a wallet.
Suarez said he envisions Miami using a Bitcoin system to make payments in the future. “We need for people to understand that … yes, we want you to hold bitcoin but we also want to increase the utility of bitcoin,” he said.
Last month, Suarez told The Washington Post that he plans to turn Miami into the world’s “cryptocurrency innovation hub,” and that the digital coin would “revolutionize” how the city funds multiple programs such as poverty and keep it free from raised taxes.
“When you think about the possibility of being able to run a government without the citizens having to pay taxes. That’s incredible,” told the Post.
Earlier this month, the Miami Mayor told Fox Business that he will be accepting his next paycheck entirely in bitcoin in a move to showcase the city as one of the most “innovative cities on the planet.”
According to the New York Post, Suarez gets paid around $97,000 annually as of 2018. This was his salary from the city but it wasn’t clear whether the Bitcoin payments would also apply to his other positions as lawyer, and partner at private equity firm DaGrosa Capital Partners.
Cryptocurrencies, including Bitcoin, have remained unregulated within the U.S. financial system but multiple financial institutions are tapping into the digital coin industry.
Bank of America last month announced it has launched digital asset research to “explore the implications across industries including finance, technology, supply chains, social media, and gaming,” while noting that “digital assets are transforming the way in which markets, businesses, and central banks operate.”
JPMorgan Chase & Co. in August also started giving its wealth management clients access to six crypto funds, CNBC reported. The Commonwealth Bank of Australia (CBA) earlier this month also said it will offer customers the ability to buy, sell, and hold crypto assets.
Meanwhile, China’s central bank declared all cryptocurrency-related transactions illegal and vowed to suppress the virtual currency market.