Many city leaders spent 2021 looking for ways to take advantage of a soaring cryptocurrency market, seeing a highly speculative and largely unregulated asset class as not only a lure for the tech and financial services industries, but as a new revenue stream for their governments. Bitcoin even climbed above $68,000 in November, around the time Suarez was detailing plans to distribute a MiamiCoin stash<\/a> that was then worth $21 million.<\/p>\n\n\n\n But in the intervening months, bitcoin has dropped by more than half, dipping as low as $26,000 in recent weeks. It hasn’t entirely zapped the hype in city halls, but some cities have become a bit less chatty about their cryptocurrency prospects.<\/p>\n\n\n\n \u201cIt seems for the most part everyone\u2019s trying to stay a little quiet,\u201d said Tonantzin Carmona<\/a>, a Brookings Institution fellow who\u2019s been critical of cities pursuing cryptocurrency endeavors. \u201cIt\u2019s all over the news, so it\u2019s not as if they\u2019re unaware.\u201d<\/p>\n\n\n\n Since crypto\u2019s descent began, Philadelphia has formally backed off<\/a> its plans to engage with CityCoins, citing market volatility and a lack of obvious use cases. That decision came just a few weeks after city Chief Information Officer Mark Wheeler told StateScoop the project had received Mayor Jim Kenney\u2019s blessing<\/a>. (Wheeler, who earlier this year told the New York Times<\/a> he had even stopped listening to the morning news in favor of crypto-themed podcasts, did not respond to requests for comment.)<\/p>\n\n\n\n And while CityCoins is still planning to launch themed tokens for Austin<\/a> and New York, there\u2019s much less hype in those cities than what happened in Miami, where Suarez in February said the city was able to withdraw $5.25 million to fund a rental-assistance program. The Austin City Council in March passed a resolution exploring whether the city might accept payments in bitcoin and other digital currencies, including a “local complementary currency.” Members did not reply to requests for comment.<\/p>\n\n\n\n \u201cMy view is government officials should be taking more of a human-centered approach in their policy making.”<\/p>Tonantzin Carmona, Brookings Institution fellow<\/cite><\/blockquote><\/figure>\n\n\n\n As for New York, Adams still continues to tout the city\u2019s status as financial center for why it should be a cryptocurrency magnet \u2014 \u201cthis city can be at the forefront of these emerging new sectors,\u201d a City Hall spokesperson said recently<\/a> \u2014 but his own investments have taken a beating, dropping by roughly 30% since he spent those first three paychecks.<\/p>\n\n\n\n But rather than chase market swings, critics like Carmona say cities should be taking more methodical approaches to emerging technologies.<\/p>\n\n\n\n \u201cMy view is government officials should be taking more of a human-centered approach in their policy making,\u201d she told StateScoop. \u201cThey should be listening to constituents, the constituents\u2019 pain points and then finding the solution.\u201d<\/p>\n\n\n\n Crypto, she said, does not fit that model.<\/p>\n\n\n\n \u201cWith crypto, it seems like we\u2019ve put the cart before the horse, that mayors are looking for problems to solve,\u201d she said. “More specifically, they\u2019re trying to find the use case. Because right now, the major use case is speculation. I don\u2019t even know what they\u2019re trying to solve.”<\/p>\n\n\n\n Nor is Carmona sold on arguments that cryptocurrency opens pathways for marginalized communities to access financial services. In addition to the technology required to operate a digital wallet, crypto poses other barriers to entry, notably a lack of widespread acceptance by real-world vendors, fluctuating prices and transaction fees that can swell depending on the value of a trade and overall market volume. The crypto industry also has a growing fraud problem, with an estimated $1 billion lost<\/a> to scams between January 2021 and March 2022.<\/p>\n\n\n\n \u201cThat is scary. And there are no consumer protections,\u201d Carmona said.<\/p>\n\n\n\n But even amid the critics and toned-down hype, more cities are forging ahead with their crypto plans. On April 26 \u2014 a day bitcoin plunged by nearly $2,000 \u2014 Fort Worth, Texas, became the first U.S. city to mine cryptocurrency<\/a> from within a government building when Mayor Mattie Parker switched on three mining rigs inside the IT department.<\/p>\n\n\n\n The move, according to a press release from the 38-year-old mayor, was made to turn Fort Worth into a \u201ctech-friendly city.\u201d But Parker\u2019s office declined to comment further, instead referring StateScoop to the Texas Blockchain Council, an industry group that aims to further stoke the crypto industry\u2019s growth in the state and has donated the three Antminer S9 computers that are now crunching equations around the clock in Fort Worth City Hall.<\/p>\n\n\n\n \u201cThe city was looking for a way to set themselves apart,\u201d said Lee Bratcher, the council\u2019s founder and president. \u201cAt the very minimum, it was a good exercise for their innovation muscles.\u201d<\/p>\n\n\n\n Similar to MiamiCoin \u2014 which is cultivated by private investors, with a portion going to an account that can only be accessed by Mayor Suarez\u2019s government \u2014 Bratcher sees Fort Worth\u2019s new endeavor as not bringing any financial risk to the city.<\/p>\n\n\n\n \u201cThey don\u2019t have any money at stake,\u201d he said. \u201cThey can mine it and convert it directly to dollars or they can hold it.\u201d<\/p>\n\n\n\n Under the program Parker launched, Fort Worth could periodically cash out some of the bitcoin it raises to fund technology education programs in city schools. But there\u2019s no guarantee of a windfall.<\/p>\n\n\n\n \u201cIt could lose a lot of value,\u201d Bratcher said. “There\u2019s no guarantee it\u2019ll increase this year. It may end the year down or worse.\u201d<\/p>\n\n\n\n But crypto\u2019s risk is outweighed by its popularity, Bratcher said, pointing to a poll his group commissioned, which found bitcoin has a \u201cnet +10\u201d favorability rating among Texans (though one-third of respondents said they had no opinion). His poll also found bitcoin to be broadly popular among Blacks, Latinos, people younger than 55 and respondents across party lines.<\/p>\n\n\n\n While the Texas Blockchain Council may donate more mining rigs to more cities in the future, Bratcher said he\u2019s not pushing anyone to invest individually.<\/p>\n\n\n\n \u201cWe lead off that this is not financial advice,\u201d he said. \u201cThis is something the city has chosen to do. It would be much more scrutinized if the city were to buy bitcoin with public dollars.\u201d<\/p>\n\n\n\n There have been other developments since Fort Worth. Chicago Mayor Lori Lightfoot last month celebrated the opening of a new headquarters for FTX<\/a>, a major crypto exchange, that came with a program giving 100 low-income residents $500 monthly payments and financial literacy lessons. But Carmona, who once worked for the City of Chicago, noted those payments will come in the form of an FTX-branded debit card. He worried it could lead to \u201cpredatory inclusion.\u201d<\/p>\n\n\n\n \u201cMarginalized communities are previously defined access to a good,\u201d she said. \u201cAll of a sudden they’re given access, but it comes with conditions that compromise the benefits.\u201d<\/p>\n\n\n\n Meanwhile, Miami\u2019s Francis Suarez said at the World Economic Forum<\/a> in Davos, Switzerland, last month that he continues to convert his paychecks into bitcoin and that he was unperturbed by its steep drop \u2014 or the fact that MiamiCoin has lost 95% of its value<\/a> over the last nine months.<\/p>\n\n\n\n Critics say that should bring the crypto mayors a bit of perspective.<\/p>\n\n\n\n “Cryptocurrencies aren\u2019t based on anything other than code,\u201d Carmona said, \u201cand the fact that we\u2019re relying on people finding it valuable? What happens when no one does?\u201d <\/p>\n","protected":false},"excerpt":{"rendered":" Bitcoin has lost half its value, but many cities are still looking to embrace cryptocurrency, even if there’s not really a good use for it.<\/p>\n","protected":false},"author":200,"featured_media":50010,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"disable_grayscale_images":true,"grayscale_contrast":0,"sponsored_content":false,"display_author_bio":true,"story_type":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[20649],"tags":[438,1383,1794,2411,21253,23216],"people":[],"special-report":[23777],"authors":[4697],"class_list":["post-50008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-emerging-tech","tag-miami","tag-bitcoin","tag-cryptocurrency","tag-fort-worth","tag-francis-suarez","tag-eric-adams","special-report-emerging-tech-a-statescoop-edscoop-special-report","author-benjamin-freed"],"yoast_head":"\n‘I don\u2019t even know what they\u2019re trying to solve’<\/h4>\n\n\n\n
![\"mr](\"https:\/\/statescoop.com\/wp-content\/uploads\/sites\/6\/2022\/06\/GettyImages-1392618880.jpg?w=1024\")
‘A way to set themselves apart’<\/h4>\n\n\n\n
Nothing but code<\/h4>\n\n\n\n