MiamiCoin Could be Presage Crypto's Undoing

by Chris Oates

The Super Bowl was full of ads about cryptocurrency. This might make you think that crypto has finally made it, is fully mainstream, and is safe from regulation. That would be premature. Crypto has largely developed absent all government regulation and, given the actions against crypto firms involved in the Canadian anti-vaccine protests, are vulnerable to them.

MiamiCoin is an interesting case study of a cryptocurrency that appears to be getting out in front of the regulations. It is built on Bitcoin and 30% of the coin created will go to the City of Miami. In essence, it is a crypto currency with a 30% municipal tax on mining. This seems brilliant. Rather than being seen as a threat by regulators, MiamiCoin will become a revenue stream to the government, winning allies in office.

However, getting close to politics could also be MiamiCoin’s undoing. Crypto developed free of regulations, in part, because it didn’t cross the radar of elected officials that much. But now that there is a coin that is a part of a municipal budget, uncomfortable questions may start being asked. Why is Miami, one of the most vulnerable cities to climate change, connected to the carbon-emitting Bitcoin? What happens if MiamiCoin is used for illegal activities? What does the incentive to prop up the price mean for the government? And what happens when these questions are asked by political journalists to candidates for office? Addressing the regulatory environment of crypto could come much faster on the back of news coverage in south Florida.