With Miami coming back from the “high” of hosting the “biggest” Bitcoin event of all time, it seems reasonable to ask: Does the Entrepot of the Sunshine State really have what it takes to become the “World Capital of Cryptocurrencies”? – a new role foreseen by its dynamic mayor. If not, could Miami at least become the next Crypto Valley – a cradle for cryptocurrency and blockchain innovation like the Swiss canton of Zug?
The optics definitely look good. As the New York Times noted in its coverage of Bitcoin 2021 last week Gathering, “The City Is Full Of Crypto,” With Bitcoin ATMs Sprinkling Miami’s Wynwood District. Meanwhile, the FTX crypto exchange has secured the naming rights for the Miami Heats arena, while Miami’s Mayor Francis Suarez also made a proposal to allow citizens, among other things, to pay taxes with cryptocurrency.
Others warn, however, that there is still a lot of hard work ahead of them – and regulatory / legislative events must take a favorable turn before Miami can claim to be the capital of everything in the rapidly evolving crypto-verse.
Enabling legislation is crucial
“Miami can’t do this without Florida state lawmakers passing pro-crypto law,” Zachary Kelman, managing partner at Kelman Law, told Cointelegraph, which was followed by a question about Bitcoin 2021 as a milestone and harbinger of great things. Kelman replied, “Yes, but in large part due to the backlog of such a conference given the crypto bull market during the pandemic.”
Kelman is not a crypto-skeptic – quite the opposite. He is a member of the Florida Blockchain Business Association, which is actively campaigning for the necessary state legislation on crypto-enabling. With that secured, Miami could become a crypto hub even without federal legislation, he said because:
“The rules for sending money, largely governed by state lawmakers, hold the key for crypto companies to thrive in a particular jurisdiction. Most of the activities remain in the exchange area, followed by the growth of ‘DeFi’ projects, which often also fall under state rules for money transfer. “
Miami has other advantages over other emerging crypto hubs – even Wyoming, which already has crypto-supporting state laws – Hemang Subramanian, assistant professor at Florida International University’s business school, told Cointelegraph. Miami is an international city with a developed banking infrastructure, and many venture capitalists and high net worth individuals are interested in funding innovation. In addition, “it is one of the largest financial centers in the country with a large port and a huge expat population from South America, the Caribbean and Europe”.
Benjamin Sauter, an attorney at Kobre & Kim LLP, agreed with Subramanian that Miami was an attractive destination and business hub “especially as digital currencies begin to take the Latin American market by storm”. Florida also lacks state income tax – another plus, he told Cointelegraph. But these benefits may still not turn the city into a global crypto hub, even with favorable state legislation:
“Most of the serious legal work needs to be done at the federal level. Much of the current discussion has centered on the fight against money laundering, international cooperation and asset recovery, and tax enforcement. Wealthy individuals and businesses in the [crypto] Platz would be wise to plan government control and enforcement measures in these areas instead of holding your breath in Miami for a quick fix. “
Lane Kasselman, Chief Business Officer of Blockchain.com, who recently announced that it will be relocating its US headquarters from New York to Miami, was understandably optimistic about the company’s sunny new second home and told Cointelegraph: “Miami is already the [new] Crypto Valley and last week’s announcements prove it. “Mayor Suarez is a vocal advocate of technology investments in the region, he added, and” Miami’s welcoming regulatory environment will help drive crypto innovation. “
Miami seen from abroad
What about the distance view? Thomas Nägele, a lawyer who played a role in the development of Crypto Valley, told Cointelegraph, “I think Miami is in a very good position to be a blockchain hub like Crypto Valley in Switzerland and crypto-land Liechtenstein to become “, adding several caveats:
“A blockchain hub cannot simply be imposed; it has to be supported by the community, needs a certain number of companies that are active in this area and, last but not least, needs legal clarity. ”
This last point, “legal clarity”, is of the utmost importance, stresses Nägele, and “the perfect example of this is Liechtenstein with its TVTG – also known as the Blockchain Act – which provides the legal framework for the tokenization of assets.”
Ian Simpson, Senior Marketing and Communication Manager at Bitcoin Suisse AG – a company based in Crypto Valley – told Cointelegraph: “One of the challenges for larger cities and countries is that crypto can be ‘swallowed up’ by the broader technology ecosystem, and this can dilute the attractiveness for blockchain projects. ”He added:“ The close contact and access to ideas, talent and quality services are some of the things that have made the Crypto Valley of Switzerland what it is. We’ll have to wait and see how things develop in Miami. “
When asked whether Bitcoin 2021 should be seen as a milestone event for the crypto and blockchain space, Simpson replied that while it was a welcoming event, especially after all of the bans of the past year, “There doesn’t seem to be any significant change caused or development in the community – and as we saw, this had no effect on the markets. “
For his part, Nägele called it a “shame” that most European countries were on a quarantine list and couldn’t attend the Bitcoin 2021 meeting, “but what my friends told me it was an amazing event and it always is” a good start for an ecosystem. ”While Kasselman commented,“ There is no question that we have reached a critical turning point where crypto has moved from niche to mainstream, ”he told Cointelegraph:
“It is remarkable that the conference was not just about Bitcoin, but also about the ecosystem: From DeFi to NFT to SushiSwap. Crypto is an industry, not just one [single] esteemed sign. “
A new focus?
Overall, is it even possible to identify the nerve center of the crypto / blockchain world, and if so, could it change? It can shift from time to time, according to Nägele, “depending on where there are attractive conditions for the respective company. Europe, and Switzerland and Liechtenstein in particular, were certainly early adopters, and Asia has been catching up recently. I’m really looking forward to welcoming Miami to the club, but ultimately I hope we see the world as a crypto hub. ”
Simpson added, “The US has a strong position in the blockchain and crypto space because of its technology leadership and Coinbase’s recent IPO. However, Europe and Switzerland seem to offer more openness on the regulatory side, and the Asian ecosystem is also heavily weighted due to its size. ”However, it is still difficult to point to a single focus in the blockchain ecosystem, he added.
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“While the US and Europe get a lot of the press, Latin America and Asia have the fastest growth in retail users,” added Kasselman. “It is likely that emerging markets will accelerate adoption of core products and mature markets will increase their use of the expanding crypto ecosystem as crypto becomes more ubiquitous in financial services.”
“I think Miami could easily be the American cryptocurrency capital if it isn’t already,” noted Kelman. “However, without the support of federal legislation, it is impossible for Miami to become the international crypto capital,” and recent signs “point to more burdensome federal legislation than crypto-friendly laws in the near future.”
Subramanian said that regulation always follows innovation and “in a democracy the ‘will’ of the people will eventually play out”. That said, the required state and federal laws will eventually come. “If Zug can become a crypto blockchain port in Switzerland, Miami can too. It’s more diverse, more international and much more capital-friendly, ”he added.