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Miami to be World’s Bitcoin and Cryptocurrency Capital

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  • The Miami city has gone full Crypto with Bitcoin ATM’s
  • Others say there is still a lot of hard work waiting for regulatory and legislative events
  • Miami could be the new Gravitational Center

Miami has a dynamic mayor, a lot of venture capital money, and just hosted the world’s largest crypto event, but is that enough without legal clarity? As Miami recovers from the high of hosting the largest-ever Bitcoin event, it’s reasonable to wonder if it has what it takes to become “the world’s cryptocurrency capital, as its dynamic mayor envisions. If not, could Miami, like the Swiss canton of Zug, become the next Crypto Valley — that is, a cradle for cryptocurrency and blockchain innovation?

The adoption of cryptocurrency in Miami

The optics appear to be excellent. The city has gone full crypto, as the New York Times put it in its coverage of last week’s Bitcoin 2021 conference, with Bitcoin ATMs strewn throughout Miami’s Wynwood neighborhood. Meanwhile, crypto exchange FTX has secured the naming rights for the Miami Heats arena, and Miami mayor Francis Suarez has proposed, among other things, allowing citizens to pay taxes with cryptocurrency.

Others, however, warn that there is still much work to be done — and that regulatory/legislative events must turn in Miami’s favor before it can claim to be the capital of anything in the rapidly evolving crypto-verse.

The importance of enabling legislation cannot be overstated

Miami cannot do this unless the Florida state legislature passes pro-crypto legislation, said Zachary Kelman, managing partner at Kelman Law, in response to a question about Bitcoin 2021 being a watershed moment and foreshadowing of big things to come. Yes, but in large part because of the pent-up demand for such a conference given the crypto bull market that occurred during the pandemic, Kelman responded.

Kelman is far from a skeptic of cryptography. He is a member of the Florida Blockchain Business Association, which is working to pass the necessary crypto-enabling legislation in the state. Even without federal legislation, Miami could become a crypto hub if that is secured, he said.

Hemang Subramanian, assistant professor at Florida International University’s business school, said that Miami has other advantages over other emerging crypto hubs, including Wyoming, which already has crypto-friendly state laws. Miami is a global city with a well-developed banking infrastructure, and many venture capitalists and high-net-worth individuals are interested in investing in new ventures. 

Furthermore, it is one of the country’s largest financial hubs, with a large port and a large expat population from South America, the Caribbean, and Europe, according to the report.

Benjamin Sauter, a lawyer at Kobre & Kim LLP, agreed with Subramanian that Miami was an appealing destination and business hub, especially now that digital currencies are gaining traction in Latin America. Another advantage is that Florida does not have a state income tax. Even with favorable state legislation, those advantages may not be enough to turn the city into a global crypto hub.

Miami from outside

What about a bird’s eye view from afar? Thomas Nägele, an attorney who was involved in the development of Crypto Valley, believes that Miami is in a good position to become a blockchain hub, similar to Crypto Valley in Switzerland and Crypto Country Liechtenstein, but with a few caveats. The last point, legal clarity, is critical, according to Nägele, and the perfect example for that is Liechtenstein with its TVTG — also known as the Blockchain Act — which provides the legal framework for asset tokenization.

One challenge for larger cities and countries, according to Ian Simpson, senior marketing and communication manager at Bitcoin Suisse AG, a company based in the Crypto Valley, is that crypto can be swallowed up by the wider tech ecosystem, diluting the attractiveness of blockchain projects. Close contact and access to ideas, talent, and high-quality services are some of the factors that have shaped Switzerland’s Crypto Valley. We’ll have to see how things play out in Miami.

Most European countries were on a quarantine list and were unable to attend the Bitcoin 2021 gathering, according to Nägele, but what my friends were telling me, it was an amazing event, and this is always a good start for an ecosystem. There’s no doubt we’ve reached a critical inflection point where crypto has moved from niche to mainstream, Kasselman said.

Is there a new gravitational center?

Is it even possible to pinpoint the crypto/blockchain world’s nerve center, and if so, how likely is it to shift? Depending on where attractive conditions exist for the relevant companies, Nägele said, it may shift from time to time. Europe, particularly Switzerland and Liechtenstein, were early adopters, and Asia is now catching up. I’m excited to welcome Miami into the fold, but I also hope that we consider the entire world to be a crypto hub.

The United States has a strong position in the blockchain and crypto space due to its technological leadership and the recent IPO of Coinbase, Simpson continued. However, Europe and Switzerland appear to have more regulatory openness, and the Asian ecosystem carries a lot of weight due to its size. However, he added, identifying a single center of gravity in the blockchain ecosystem is still difficult.

Regulation always follows innovation, according to Subramanian, and in a democracy, the people’s will would  eventually play out. That is, the necessary state and federal legislation will be enacted at some point. If Zug, Switzerland, can become a cryptocurrency and blockchain haven, so can Miami. It’s more diverse, international, and capital-friendly, he continued.

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