Miami Fun, Sun And….Cryptocurrencies

May 18, 2021

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According to an article published by the New York Times on March 23, 2021, the Mayor of Miami – Francis Suarez – wants to change the image of his city from “fun in the sun” to “tech and finance”. Last February Bloomberg News wrote about the Mayor’s intention to allow city workers to be paid in bitcoins and to collect taxes in bitcoins.[1] The commission later toned down the statement and only agreed to study the proposal, for the moment. The commissioner voted to launch education campaigns in English, Spanish, and Creole to inform people about crypto. They also voted to encourage the state legislature to pass laws that would allow Miami to invest public funds in cryptocurrency.

The Mayor uses cryptocurrencies to spearhead his campaign “to combine the financial elements of New York City and the technology character of San Francisco into a South Florida finance and tech oasis, the mayor is bringing a different attitude and policy outlook on innovation”.[2]

The cryptocurrency exchange FTX is seeking to name the NBA Arena, the current sponsorship contract with American Airlines ended in 2019. It looks likely to go through, that would be the first NBA sponsorship with a techno-company.

If Mayor Suarez plan to allow staff to be paid in bitcoins goes through that would be the first US administration to use cryptocurrencies. This would also be a practical step forward from conversations about cryptocurrencies that are happening in central banks (e.g. the Bank of England) or with regulators. Regulators are also discussing whether to allow Crypto-based Exchange Traded Funds. The Mayor’s plan would bring cryptocurrency closer to people who are not techno-geeks or high-risk investors who can afford to set aside capital for a long time.

It will be interesting to see if people who are paid part of their salary in cryptocurrency would use them for savings or would convert them into cash. It will be interesting to see how long it takes for sellers of big-ticket items to accept payment in cryptocurrencies.

Whatever happens, the Mayor’s proposal would increase the number of people that keep their savings in bitcoins. We discussed in another article[3]how a portfolio strategy makes your savings in bitcoins go further than simply relying on an upside in the value of bitcoins. The City of Miami paying part of the salary with bitcoins, accepting payments in bitcoins for city taxes and other city services, and allowing its treasury to invest in bitcoins would represent a transformational step for cryptocurrencies in general. More than ever, we have to watch this space.