Miami Mayor Francis X. Suarez, right, meets and greet residents of Liberty City, Miami, as they tour the neighborhood, July 6, 2018. (AP Photo/Brynn Anderson)
Miami Mayor Francis Suarez announced on Twitter that city residents will soon be getting a Bitcoin “yield” as part of a new program that the city has staked in its own cryptocurrency, MiamiCoin.
In an interview with CoinDesk, Suarez said he was planning to convert the millions of dollars in proceeds produced by MiamiCoin into a Bitcoin dividend.
The Bitcoin yield will be paid directly to residents who acquire a wallet, register for the dividend, and pass a verification process.
MiamiCoin was launched in August through CityCoins, a stacks-based protocol that allows residents to hold and trade their city’s token.
The protocol generates revenue for the city when residents mine tokens, with those running the software receiving 70 percent of the coins they mint and 30 percent returning to the municipality in a city wallet.
The cryptocurrency has generated more than $21 million in the past three months for Miami. When annualized, it will amount to roughly $80 million, which is already one-fifth of the city’s total annual tax revenue of $400 million, according to Suarez.
Suarez has cited the project as a possible avenue to ease the tax burden on Miami residents, which he says would be “revolutionary.”
“We are going to be the first city in America to give a Bitcoin yield as a dividend directly to its residents” Suarez said. “We are going to create digital wallets for our residents, and we are going to give them (some) Bitcoin directly from the yield of MiamiCoin.”
Determining who qualifies for the dividend is going to be a challenge, Suarez acknowledged, adding that he was not sure whether it would be given to taxpayers, citizens with an address in Miami, or if it should be given to people who vote in the city.
There are also technological impediments in making this happen. He said he would have to tap multiple companies and crypto exchanges to set up wallets for the recipients, which would require large-scale registrations and verifications.
The Miami mayor plans to make Miami a new center of digital finance. He is working on a plan to pay city officials in cryptocurrency.
However, this has raised internal concerns, according to a Vice News report. There are worries over the risk and liabilities that come with tying a public employee’s compensation to a cryptocurrency that has fluctuating value.
Bitcoin and some other cryptocurrencies are legal in the U.S. Other cities including New York are also getting their own tokens similar to MiamiCoin.
“People still don’t get what Bitcoin can do to improve our lives!” tweeted Hazim Samawi, an architect, crypto enthusiast and trader. “At some point the city of Miami will be a tax free city for all residents by staking Bitcoin.”
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