'I Don't Push Anything': Mayor Francis Suarez on MiamiCoin

Suarez, who praised the MiamiCoin initiative last year, said bad tokenomics may have led to the private cryptocurrency created to benefit the U.S. city shedding 95% of its value in a matter of months.

AccessTimeIconMay 31, 2022 at 2:38 p.m. UTC
Updated May 31, 2022 at 6:35 p.m. UTC
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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

DAVOS, Switzerland — In September 2021, while appearing on an episode of CoinDesk TV’s “First Mover,” the mayor of Miami, Francis Suarez, said that MiamiCoin (MIA), a private cryptocurrency designed to benefit the city, has been mainstreaming faster than popular cryptocurrency bitcoin.

A month later, Suarez announced on CoinDesk TV that the city is planning to disperse yield earned from mining bitcoin to its citizens, and that it might even eliminate the need for Miami residents to pay taxes. But the mayor also warned that there should be no reason to believe MIA would not be volatile, considering how bitcoin has performed.

MIA, created by CityCoins, is built on the Bitcoin network and runs on the Stacks protocol, which generates MIA when people mint and send stacks (STX), the native token of Stacks, into a smart contract.

MiamiCoin has since crashed, shedding roughly 95% of its value from an all-time high around 5 cents in September 2021, according to data from CoinMarketCap.

CoinDesk spoke to Suarez about the fate of MiamiCoin following a media briefing last week, titled “The Future of Crypto: The View from Miami,” at the World Economic Forum’s annual meeting in Davos, Switzerland.

The following has been lightly edited for brevity and clarity.

CoinDesk: You've been an outspoken proponent of the crypto space and what it promises, particularly with MiamiCoin. What do you make of that recent crypto market downturn? Do you have any concerns?

Suarez: You know people ask me the same thing about bitcoin, the fact that it's lost more than 50% of its value, but that doesn't change my feelings about the fundamental technology. For me, what was interesting about MiamiCoin was the idea that a percentage of the mining revenue would go to the city. I just think that's a novel idea. Whether the tokenomics work is a much more complicated macro issue. Ironically, the stacks that we have earned, or that are put in a digital wallet for the city, which are approximately 11 million stacks, have actually generated about half a million dollars’ worth of bitcoin, in staking, that can be dispersed to all of our residents equally. And that's something that we've looked at as a project. So, I think the very limited conversations that I've had with some of the CityCoins people was, look, we have a concern, because when it's as inflationary as it is, you're seeing a precipitous price drop, which is what we're seeing in a lot of tokens. And that makes people lose confidence. I think the loss of confidence is what jeopardizes the project. So, if they don't want to see the project jeopardized, then they should fix it. I think that they've gotten that message out that they're trying to fix some of the tokenomics. Just to put the numbers in context, I mean, in bitcoin, you only have 19 million approximate bitcoin issued. In MiamiCoin, 3.65 billion have been issued in not even a year. So I think they were off in that tokenomic. And that's something that they're going to have to figure out.

You told Reuters that there were some glitches associated with MiamiCoin. Are you attributing the dramatic value-shedding we have seen with MiamiCoin to these technical glitches?

I mean, I can’t say that for sure, but it seems that way, when you have that kind of money supply, people are selling more than they're buying, that's usually what drops the price.

Where’s MiamiCoin at right now – what are adoption numbers like?

I don’t know.

In your view, what’s next for MiamiCoin?

I've seen some utility. I’ve seen some conferences in terms of creating utilization. I think CityCoins is also trying to fix some of the economics of it to see if they can stabilize the price from what I've read and seen in terms of some of the things that they've put out. I think once those things happen, then I think we'll see. I mean, we have used $5 million that was granted to us for a rent stabilization program to help people whose rent has increased by more than 20%. Then there's $11 million in a digital wallet that has created half a million dollars in bitcoin, and our intention was to disperse that. We're sort of seeing how this all plays out before we make a final decision.

You said MiamiCoin is an idea.

Exactly. Yeah.

Are you talking to other leaders and mayors, perhaps, on how it might be replicated in other states or cities?

You should talk to CityCoins. They are the ones that have the mining equipment. They have also created more coins.

Are you also speaking or advocating to push this idea of a city coin to other places?

I don't push anything. I talk about the facts, that's what I do.

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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

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