Miami's mayor announced the city has received about $5 million from MiamiCoin after the city decided to cash out during a volatile time in crypto.
Mayor Francis Suarez made the announcement via tweet, calling it a "historic moment," writing in part that the city “received its first-ever disbursement … totaling $5.25m" from the MiamiCoin project.
The disbursement is actually a donation made in U.S. dollars by CityCoins - which operates MiamiCoin.
“Any person in the world ... if they want to contribute to Miami, if they like Miami, that person can buy the MiamiCoin,” said Pouyan Esmaeil Zadeh, an assistant professor at Florida International University who studies cryptocurrency.
The $5.25 million donation comes as crypto has taken a nosedive from record highs - including MiamiCoin.
“Because the whole system is down MiamiCoin is also down,” Zadeh said.
According to new reporting by the Miami Herald, the digital wallet earmarked for the city went from $29 million in value to as low as $13 million. While it’s unclear when the city exactly cashed out, it’s up to city officials to pick when to do so.
“The markets have taken a big dip and to sell now it’s telling me there’s no one who is acting as a fair fiduciary for the people of Miami,” said Kurt Wuckert Jr., a crypto expert.
In order to buy MiamiCoin, it has to be mined — that can be done by anyone — 30% of what miners spend is put in a digital wallet that is reserved for the city. In the end, it’s money the city didn’t have.
Suarez has said he may use the proceeds to create affordable housing, potentially fund city services, or lower taxes. A spokesperson for the mayor told NBC 6 that officially, the city manager can request the withdrawal of funds, and how the money is spent after being withdrawn is up to the city commission.
Wucker is skeptical of the project.
“Miami didn’t need another money and that’s how it was put — like, hey, you can spend MiamiCoin in Miami, but all of the incentives of the coin are to hold it," he said.
Despite its wild swings, MiamiCoin is still worth about 65% more than it was when it was first released.