Flush with cryptocurrency, Miami wants to give every resident some bitcoin

The City of Miami plans to pay out city residents using $21 million in cryptocurrency that it’s been stashing away since August, Mayor Francis Suarez said on Thursday.

The plan, which will potentially require the creation of digital wallets for all of Miami’s 442,000 residents, is the latest step in the city government’s larger plans to embrace blockchain-based funding and digital service mechanisms.

During an interview with CoinDesk, Suarez announced plans to supply Miami residents — either those who vote, live or pay taxes in the city, though it’s unclear exactly which — with a digital wallet and a yet-to-be-determined amount of bitcoin from the city’s own dedicated digital wallet.

The mayor said the city plans to partner with a variety of cryptocurrency exchanges to sort through the technical challenges of registering each resident with a digital wallet. Then the city will distribute the funds, he said, using a yet-to-be-created digital registration or verification system to mitigate the potential for fraud or for people moving to Miami just to receive bitcoin.

“We want to make sure our residents, employees — we talked about this when we were going to pay our employees in bitcoin — understand why we are making such an emphasis on bitcoin,” Suarez said during the interview.

Suarez said he’s currently working with Miami-Dade County Commissioner Danielle Cohen Higgins to align city and county efforts to enable residents to pay taxes in bitcoin, though it’s unclear how the city would stabilize the volatile cryptocurrency to accept it. To pilot the bitcoin payment project, Suarez said he has promised “a few hundred dollars in bitcoin” to members of a local youth advocacy organization, 5000 Role Models of Excellence.

“We’re looking at all the different technologies and efficient ways to get it to people’s wallets,” Suarez said.

Miami is able to offer cryptocurrency because of a partnership with a nonprofit organization called CityCoins, a group of cryptocurrency enthusiasts who, in early August, opened a digital wallet and a new digital currency — called MiamiCoin, for the city to access, with no strings attached.

Every time a MiamiCoin is mined, the city receives 30% of its value in the dedicated wallet, while the miner retains the remaining 70%. One MiamiCoin is worth roughly two one-hundredths of a cent, though miners have generated more than $21 million in revenue for the city since August. City commissioners in September voted to accept the wallet and its funds, with caveats that the city doesn’t endorse CityCoins or MiamiCoin and does not technically hold any cryptocurrency; if Suarez were to extract funds from the wallet, the money would be in U.S. dollars.

If the city were to use its entire $21 million wallet on the scheme, each of Miami’s 442,000 residents would only receive seven-ten-thousandths of a bitcoin, equivalent to about $47, as of Friday. (Suarez told CoinDesk that the small payments are meant to increase the “utility” of cryptocurrency throughout the city.)

Suarez’s announcement Thursday is the latest public step he’s taken to promote Miami as a destination for those interested in developing blockchain-based or cryptocurrency-based technologies. Suarez and Miami Chief Information Officer Mike Sarasti have both announced plans to convert portions of their paychecks into bitcoin. Sarasti told StateScoop he views his role as CIO, at least partially, in the context of a “concierge” for the city’s new industries. Suarez has also spent the last year courting bitcoin mining operations and exchanges to open offices in Miami.