MiamiCoin, a currency without sovereignty

The author is a contributing editor of the Financial Times

Earlier this month, Miami Mayor Francis Suarez announced that he will Pay his next salary in BitcoinThe new mayor of New York replied that he would take three of his. This kind of puff is the standard of the mayor of the United States.

It’s not a bad idea to value your salary in value-added assets, or at least to convert it as quickly as possible. For example, when I finish writing, I plan to ask my editor to pay for my real estate.

What Suarez and Adams are actually doing is announcing their sincerity to cryptocurrency developers and investors. This week, the trading platform, agree and support 700 million US dollars for the naming rights of the Los Angeles Lakers basketball court. This may mark the height of the bubble or the beginning of the next industrial revolution, but while we are all waiting to see what happens next, it would be foolish for any mayor not to invite a potential tax base.

However, behind Suarez’s announcement, there is a series of more cunning actions aimed at anchoring more cryptocurrencies in Miami’s balance sheet.These include alliances with creators called cryptocurrencies Miami coin. City-states have a long history of their own currency production. But in the past, production was accompanied by monetary sovereignty—the ability to control quality and quantity. Miami is launching a novel experiment: it lends its name to funds outside its control.

Financial centers are not just places with large amounts of capital. Finance is a set of tools. If you want them to work, you need to put a lot of people who know how to use them in the same place. Fernand Braudel, who has written extensively on the economic history of medieval Europe, described financial skills as a kind of “inheritance” that was slowly accumulated through daily business practices.

In the 13th century, Leonardo Fibonacci brought Arabic numerals and abacus to Pisa. By the end of the century, merchants in northern Italy—perhaps in Florence—developed double-entry bookkeeping.It was disseminated in part through the publication of 1494 Arithmetic summary, The text of the Venetian Luca Pacioli. The Italian city-states did not invent a credit currency. But they make it more efficient-easier to use and easier to create. However, this increase in efficiency did not happen by accident. Historian Peter Spufford recorded how lay teachers appeared in Florence and Venice to encourage literacy and arithmetic.Lucca City hired one Priest, A business accounting teacher who specializes in helping commercial houses in this city.

In Miami, Suarez’s signal is basic economic development. If you think that encryption is the future of finance, then you must make sure to invite Fibonacci and Pasiolis to your city. Miami is considering allowing city employees to use bitcoin to receive wages, and Suarez said he hopes it can also use bitcoin to collect taxes.This is still an economic development plan-trying to encourage the use of encryption, hoping to attract more encryption Monk.

The city did have its own monetary policy beginnings, although Renaissance Italy offered fewer models. In August, miners began to produce MiamiCoin, and currently trading As Mia. The miners have no contact with the city. MIA sitting Stack, Blockchain or electronic transaction ledger. Stacks uses Bitcoin as a settlement and reserve asset—just like commercial banks use reserves held by the Federal Reserve. The miners that produce MIA provide the City of Miami with a 30% profit share.

In September, the Commissioner of the City of Miami voted to accept a share worth $21 million last week. This is a seigniorage-the profit of making money. The city gains monetary profit, But there is no currency control. This is a departure.

Bitcoin advocates like to point out that Italian city-states produce high-value gold florins and gold coins—hard currency, just like Bitcoin. This is only partially correct. Gold is used for long-distance trade, but Venice and Florence also reserve a supply of silver coins for small domestic transactions. over time, They made those coins smaller, As the country’s economy expands, keep prices stable. Italian commercial cities are not fetishists of hard currency. They insist on their monetary sovereignty and carefully reduce the value of their national currency over time because they are growth superstitions.

Essentially, cryptocurrency is a bet that the production of currency should be purely a private matter. The challenge with this idea is that historically, different groups of people need different monetary policies. Hard deflation and tight credit are good things for some people. Soft money and easy credit are good for others. When countries and cities claim monetary sovereignty, they mediate between different interests. This is the basic job of any country.

If MiamiCoin grows and token-denominated contracts become part of the city’s daily life, eventually the City of Miami will have to decide whether it needs not only part of the profit from MIA, but also some control measures, as well.

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