Do you just “talk the talk,” or really “walk the walk?”
There seems to be a race on to see which city is the real “Crypto City”, which of course means that city would be the coolest and most “cryptonized.” Miami and its Mayor, Francis X. Suarez, kicked things off a while back when the city launched “MiamiCoin” and the mayor offered to take his salary in Bitcoin. Not to be outdone, New York City mayor-elect Eric Adams endorsed the NYCCoin (New York City Coin), offered to take his first three paychecks in Bitcoin AND declared “NYC is going to be the center of the cryptocurrency industry.” Oooo! Them’s fighting words for sure. So, lets’ see who is “talking” and who is actually “walking.”
First Miami. Mayor Francis Suarez (who by the way has won two (2) elections with 80% of the vote) said Miami would give a “bitcoin yield” from MiamiCoin as a dividend to its residents, who will get digital wallets from the city. Before you scoff, bet you didn’t know the MiamiCoin token has earned over $21 million for the city since its launch in August. At this pace it would generate roughly one-fifth of the city’s annual tax revenue. Suarez also believes the city could earn over $60 million from the digital token in the next year and expressed hopes that “at one point” down the road, his city could run “without taxes.” Now that’s “talking” and “walking.”
And New York? Well certainly Miami has a huge head start and even New York’s mayor-elect, Eric Adams, doesn’t even get to sit in the big office till January 1. Even so, the new mayor has declared “NYC is going to be the center of the cryptocurrency industry.” He also thinks kids in school should be taught about cryptocurrency (btw, totally agree and should be implemented) and will seek ways to improve the city’s digital infrastructure. So, lots of “talking” but nothing in place (yet) and with only hype that means no “walking.” Is New York one of those “wannabe” city’s?
But WAIT – there is a REAL Bitcoin City – and it’s in El Salvador. The country that actually made Bitcoin legal tender. And, El Salvador is NOT adapting an existing city to crypto, but rather building from scratch and up to the latest technology. Not to be outdone by the Miami’s or New York’s boasting and hype (or any other global city for that matter), El Salvador is on record as saying they plan to be the crypto financial center of the world. Whoa! That’s “talking the talk.”
El Salvador’s President, Nayib Bukele, announced he is going to build an entire city based on Bitcoin. “Bitcoin City” will be located near an active volcano where the government plans on locating a power plant to provide energy for both the city and bitcoin mining. The city will be a full-fledged metropolis with residential and commercial areas, restaurants, an airport as well as a port and rail service. It will be laid out in a circle (like a coin) and in the city center will be a plaza that will be host to a huge bitcoin symbol. The city will have no income, property, capital gains or payroll taxes.
Brilliant? A fool’s folly? Naysayers, including a couple that caught my eye, include Steve Hanke, a professor of economics at Johns Hopkins University, have criticized plans by El Salvador to build a Bitcoin city. He called the initiative an “absurd political stunt by a delusional dictator.” Additionally, he questioned the wisdom of funding the construction of a crypto city in a country with searing poverty and inadequate social amenities. Another, Gold analyst Dan Popescu referred to El Salvador as “banana republic governed by an authoritarian regime.” Popescu took issue with the presence of foreign cryptocurrency firms in the Latin American country. Ouch!
So surely an economics professor must (or should) be aware of Economic Development, right? One way to raise living standards is to make it very attractive to entice businesses to locate somewhere and create jobs and opportunity. Like, low taxes (or none), friendly regulatory environment and low cost of living. (I realize Steve is in Baltimore and might not get the Texas/Florida allure, but hey, that’s how it works). It probably will work in El Salvador (Bitcoin City) too. In fact, with some early profits from Bitcoin purchases President Bukele has already committed to new hospitals and healthcare.
I frankly don’t get Popescu’s negativity. The whole idea is to actually attract foreign companies to locate (and create opportunity) to El Salvador and build out a global crypto financial hub (perhaps he is realizing gold is out and Bitcoin is in so he’s a touch……..jealous?) Anyway, I’m pretty sure he doesn’t object to gold mining companies being in Latin America.
So, who is “talking the talk” and “walking the walk?” Miami is on a roll and way ahead of New York, but ya gotta love El Salvador’s “Bitcoin City.”
Think big and don’t just “walk” when you can run.