MiamiCoin, uncontrolled currency

The author is an FT assistant editor

Earlier this month Francis Suarez, the mayor of Miami, announced that he would do so take his next check in bitcoin. The new mayor of New York responded that he would take the next three. This kind of pride is appropriate for American mayors.

And it is not a bad idea to put your paycheck in appreciation, or to turn it around as quickly as you can. When I finish writing, for example, I plan to ask my editor to pay me at home.

What Suarez and Adams are doing is announcing the truth to crypto makers and investors. This week, a trading platform, agreed to pay $ 700m free to name the stadium where the Los Angeles Lakers play basketball. This could signal the length of the boom or the start of the next industrial revolution, but any mayor would be foolish to call for possible taxes while we all wait and see what happens.

Behind the Suarez announcement, there are also fraudulent schemes designed to set up multiple cryptocurrencies on Miami standards. This includes an agreement with the makers of a so-called cryptocurrency MiamiCoin. There is a history of cities making their own money. But in the past the production came with monetary control – the ability to control race and quantity. Miami is launching a new experiment: lending its name to non-performing funds.

A financial institution is not a place where you have a lot of money. Finance is a group of tools. If you want it to work, you have to put a lot of people in one place who knows how to use it. Fernand Braudel, who wrote the history of the ancient European economy, described economics as a “legacy”, which is gradually accumulated through daily commerce.

In the 13th century, Leonardo Fibonacci brought Arabic and abacus numbers to Pisa. By the end of that century, northern Italian merchants – probably in Florence – had made double-digit savings. It spread slowly through publication in 1494 of Summa de Arithmetica, by Luca Pacioli, Venetian. Cities in Italy did not make loans. But they made it so effective – easy to use and easy to make. This increase in performance was not by accident, however. Historian Peter Spufford records how Lay’s teachers appeared in Florence and Venice to promote literacy. The city of Lucca hired abbachista, business finance instructor, especially to support commercial real estate in the city.

In Miami, the Suarez brand is the economic development. If you think crypto is the future of the economy, you want to make sure you import Fibonaccis and Paciolis into your city. Miami is looking to allow city workers to take their bitcoin payments and Suarez has said he wants to be able to collect taxes in bitcoin. All of this is still a process of economic development – trying to promote the use of crypto, and hoping to attract more crypto abbachistas.

The city also has its financial origins, although Renaissance Italy also offers a small example. In August, miners began making MiamiCoin, right now business on MIA. Miners do not build in the city in any way. MIA lives Milu, blockchain or electronic account of transactions. Fields use bitcoin as a backdrop and deposit assets – just as commercial banks use stocks stored in the US Fed. The miners who make up the MIA have given the City of Miami a 30 percent share of their profits.

In September, Miami city officials voted to approve the deal, last week worth $ 21m. This is a form of seigniorage – a money-making benefit. The city receives financial benefits, but there is no monetary control. This is my departure.

Bitcoin sponsors often claim that Italian cities have made precious gold florins and ducats – hard currencies, like bitcoin. That’s just a little true. The gold was a distant merchant, but Venice and Florence also kept silver coins for small items. Over time, reduced the amount, so that prices can be stabilized as their economy grows. Italian commercial cities were not bigots. They insisted on their financial management, carefully lowering the value of their household income over time because of their belief in growth.

Cryptocurrency, at its core, is a bet that making money should be a private matter. The problem with this theory is that, throughout history, different groups of people need different things from a financial plan. Strong money and strong loans are good for some people. Soft loans and loose credit are good for some. When countries – and cities – claim to be financially powerful, they represent a wide range of interests. This is an important task for any country.

As MiamiCoin grows, and the deals made in the currency become part of daily life in the city, ultimately Miami City will have to decide whether to claim not only a portion of MIA revenue, but another measure of revenue, as well.

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