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Mayors see cryptocurrency as a way to address income inequality




At a meeting of the American Conference of Mayors in DC this week, the idea is spread to provide cryptocurrency accounts to low-income people.

why it matters:
Cities are experimenting with new ways to address income inequality – such as guaranteed income programs – and the latest wave of trials could include paying out benefits or dividends in bitcoins, stablecoins or other digital currencies.

Driving news: Miami Mayor Francis X Suarez – a leading cryptocurrency champion – has promised that Miami will be “the first city in America to pay bitcoin revenue as a dividend directly to its residents” through its MiamiCoin initiative, which began in 2021 as a way to increase revenue. cities.

As the new president of the US Conference of Mayors, Suarez was looking for cryptocurrencies at this week’s meeting – and told Axi that he was doing well.

  • Suarez says the mayors of New York, Cleveland and Atlanta were among those who were enthusiastic about “how transformcoin can be transformative in their cities.”
  • His view: “Most people who are poor have their money in a bank account that earns negligible interest,” says Suarez Axios. “With the rapid inflation we have due to uncontrollable government spending, people are losing purchasing power – in fact, they are becoming poorer.”
  • “Conversely, if you had a crypto account, you could get a US stablecoin” – a form of digital currency tied to assets such as US dollars or gold – with a yield of perhaps 5% to 6%.

Mayor Suarez is the first mayor of the United States take a salary in cryptocurrencies. New York’s new mayor, Eric Adams, is second.

  • The African American Association of Mayors is beginning to schedule a meeting on cryptocurrencies so its members can learn about how it works and its potential benefits for their citizens, Phyllis Dickerson, CEO of Axios, said on Thursday.

But but but: Critics of the idea of ​​paying people with cryptocurrencies – including Suarez’s proposal to pay city workers in bitcoins – point to the volatility of these currencies, which are unregulated and historically unstable.

  • Investing in cryptocurrencies is considered so risky that some people like to gamble.
  • These are complex financial instruments with unclear tax rules and without FDIC support.

Jamie Dimon, CEO of JPMorgan Chase, is a prominent critic of cryptocurrencies: “Cryptocurrency has no intrinsic value,” he told CBS Boston in a recent interview. “There’s so much speculation going on with stocks and securities and cryptocurrencies and things like that – I’d be very careful.”

what are they saying: The details of how municipal cryptocurrency accounts would have yet to be clarified, but Suarez has won a number of adherents. “I think he’s right with this sentiment,” Cleveland Mayor Justin Bibb told Axi.

  • “I’m someone who owns a little cryptocurrency, and what you see in the rise and development of cryptocurrency is the rise and democratization of wealth creation,” Bibb says.
  • Bibb says he sees in the cryptocurrency “a unique opportunity to re-imagine how we think about financial inclusion, financial democracy.”
  • “Mayor Suarez’s management really inspired me on this issue.”

Details: Miami is successfully courting the crypto-industry – mainly through its own cryptocurrency, MiamiCoin, which, according to Suarez’s vision, is to generate enough revenue for the city to stop collecting taxes.

  • The program is partnered with CityCoins, a “non-profit and open source protocol that allows people to hold and trade cryptocurrencies representing a stake in the community,” according to the Washington Post.
  • “By running the software on their personal computers, CityCoins users are minting new tokens and earning a percentage of the cryptocurrency they create. The computer program automatically allocates 30 percent of the currency to the selected city, while users get the remaining 70 percent,” the post explains.
  • The Miami Herald said in November that the program had already brought the city more than $ 21 million.

“We are going to create digital wallets for our residents and we will give them bitcoins directly from the MiamiCoin proceeds,” Suarez said according to the Herald.

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Bottom Line: If MiamiCoin brings in newly found revenue, expect other cities to follow and issue their own cryptocurrencies – and potentially help their citizens set up digital wallets.

  • “I am thrilled that our city has distinguished itself as a crypto capital and as a bitcoin capital,” Suarez told Axios.

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