Over the past decade, crypto has flourished in many different ways. Bitcoin has matured into an investment vehicle attracting serious institutional capital, Ethereum and many other Layer 1s have captured record amounts of value across many dApps riding the DeFi wave, and the more recent NFT boom has drawn in many mainstream brands and corporations into the crypto space with GameFi applications in the metaverse as part of the latest development.
During that time, the regulatory environment has changed as well in both positive and negative ways. Across Asia, most jurisdictions have started taking a more limiting approach favouring consumer protection above equal access to innovative finance while places like El Salvador granted Bitcoin legal tender status. The countries and cities that try to provide an accommodating environment for the crypto industry do so for different reasons, with the main objective to become the first real ‘crypto hub’. Malta has tried in the past but its dreams of becoming the Blockchain Island never fully materialized, Gibraltar has recently announced it too wants to be a crypto friendly island, and since the FTX relocated to the Caribbean, The Bahamas has started to make a name for itself too.
What most of these locations lack, is an already well-established financial services industry to augment the innovative crypto industry as it extends its reach across the traditional space tapping into a wealth of Old World capital and institutional systems. For that reason, the recent pivot Miami and New York City have made towards crypto are of particular interest and the competition between the two cities to become the next crypto hub has heated up.
The two cities even have their own cryptocurrencies.
MiamiCoin and NYCCoin
Miami is aggressively angling to become the world’s crypto hub, in a direct threat to New York’s status as the main financial hub in the US. Miami Mayor Francis Suarez has gone all in on Bitcoin and blockchain, saying crypto is incredibly important to the future of the city. In a direct jab at NYC, Suarez has pointed out there is a cost of living differential, which is about two-to-one, meaning it’s twice as expensive to live in New York as it is in Miami.
Miami has recently reduced its real estate taxes to the second lowest level since the 1960s and credit ratings agency S&P Global Ratings recently upgraded some of its stance on some of Miami’s bond ratings. His strategy seems to be paying off. Cryptocurrency companies FTX US, eToro and Bit Digital have announced plans to expand in Miami, and MoonPay and Orca Capital have set up shop there as well.
New York City’s mayor-elect Eric Adams, who fears that the city that never sleeps is in fact sleeping on crypto, has been active on Twitter claiming NYC would become the center of the crypto industry. When Miami’s mayor promised to take his next paycheck in bitcoin, the NYC mayor doubled down saying he would take his first 3 paychecks in bitcoin.
Besides the Twitter rivalry between the two mayors, both cities now also have their own CityCoins.
MiamiCoin ($MIA) was launched in August 2021 as the first CityCoins token designed to reward miners and generate rewards for holders. MiamiCoin provides an avenue for Miami citizens to support the development of their city and, in turn, receive rewards for their contributions. A portion of the deposits onto the protocol goes to Miami’s city wallet, and the city’s mayor has even said the program could at some point provide tax revenue for the municipality, alleviating the tax burden on its citizens. Within 3 months, the protocol’s contribution to the city has already grown to $20 million.
NewYorkCityCoin (NYCCoin) is another variant of the CityCoins token project designed to promote an enabling crypto community in New York. It was launched on November 10, 2021, as the NYCCoin smart contract was deployed enabling citizens to start mining and stacking the token to earn rewards. Like MiamiCoin, NYCCoin creates an avenue for users to contribute to the economic growth of the city of New York. Already, the mayor-elect of New York City, Eric Adams, has expressed his support for NYCCoin.
What is CityCoins?
CityCoins describes itself as a way for citizens to generate crypto-based revenue for themselves and the cities where they live. Think of it as a system that allows users to contribute crypto funds to their home city, or support other cities, in exchange for rewards. The project has based its operation on a bitcoin-powered ecosystem such that users and cities can potentially earn bitcoin.
Miami and New York have emerged as the first two cities where CityCoins have been launched, but there is also the opportunity for citizens in any other city to introduce CityCoins – the process is actually completely in the hands of individual users and not the CityCoins team itself.
To begin the process, the crypto community needs to vote on which city they’d like to launch a CityCoin for. Once a particular city is narrowed down, the chosen city’s mayor needs to support the proposal and claim the city wallet. Then, anyone can initiate the deployment of a new CityCoin by launching a smart contract on the Stacks mainnet. Finally, a minimum of 20 individuals need to send an amount of STX – the native cryptocurrency of Stacks – to the newly created smart contract to activate the mining process.
CityCoins uses a decentralized protocol powered by smart contracts to generate value for participants and their respective cities. The goal is to enable a system that will reward users’ efforts to keep the system stable, generating funds for selected cities. CryptoCoins supports multiple tokens which allows it to create a unique token for each supported city.
All of CityCoins’ bitcoin-powered implementations exist thanks to Stacks, a blockchain infrastructure built on top of the Bitcoin network to enable smart contract applications. CityCoins can capitalize on smart contract technology and still utilize Bitcoin’s security fabric because it operates on Stacks blockchain, which is technically an extension of the Bitcoin blockchain that provides smart contract functionalities.
CityCoins miners deposit STX into the CityCoins smart contract to earn tokens such as MiamiCoin or NYCCoin. This process, known as bidding, takes place on the Stacks blockchain and involves a winning miner being selected and rewarded with CityCoins tokens each time a new block is discovered. 70% percent of all STX tokens deposited into the smart contract is distributed among stackers, while the remaining 30% is sent to the city’s wallet.
This is what makes a CityCoin more than just a symbolic flex in a bid to become the next crypto hub. It has the potential to generate real value which can then be used to invest in the right infrastructure to bring a city’s crypto hub ambitions to life.