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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 change it 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 crypto.com, 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 bubble or the beginning of the next industrial revolution, but any mayor would be foolish not to call on the tax wall 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 economic skills 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 the city’s commercial buildings.
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. Mining workers are not bound in the city in any way. MIA lives Milu, blockchain or electronic media for transactions. Fields use bitcoin as a backdrop and deposit assets – just as commercial banks use reserves located in the US Fed. Mining miners who make MIA give 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 purchases at home. 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, historically, different groups of people need different things from a financial plan. Strong money and strong debt are good for some people. Soft loans and loose credit are good for some. When countries – and cities – claim to have financial control, they are represented by 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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