As Miami descends from the “high” of having hosted the “biggest Bitcoin event of all time”, it seems reasonable to ask: Does the Sunshine State entrepot really have what it takes to become “the crypto capital of the world?” – a new role envisioned by your dynamic mayor. If not, could Miami at least become the next Crypto Valley, that is, a cradle for cryptocurrency and blockchain innovation like the Swiss canton of Zug?
The optics certainly look good. Like the New York Times indicated in his Bitcoin 2021 coverage from last week gathering, “The city has gone fully crypto,” with Bitcoin ATMs dotting Miami’s Wynwood neighborhood. Meanwhile, cryptocurrency exchange FTX has secured naming rights for the Miami Heats arena, while there was also a proposal from Miami Mayor Francis Suárez to allow citizens to pay taxes with cryptocurrencies, among other things.
But others caution that there is still a lot of work to be done, and regulatory / legislative events must take a favorable turn before Miami can claim to be the capital of anything in the rapidly evolving cryptoverse.
Enabling legislation is essential
“Miami cannot do this without the Florida state legislature passing pro-crypto legislation,” Zachary Kelman, managing partner at Kelman Law, who followed up with a question about Bitcoin 2021 as a historic event and harbinger of greats, told Cointelegraph. things to come. Kelman responded: “Yes, but in large part due to pent-up demand for such a conference, given the bull market for cryptocurrencies that occurs during the pandemic.”
Kelman is not a crypto skeptic, quite the contrary. It belongs to the Florida Blockchain Business Association, which is actively pushing for the necessary state legislation that enables cryptocurrencies. If that’s secured, Miami could become a crypto hub, even without federal legislation, he said, because:
“Money transmission rules, most of which are governed by state legislatures, hold the keys for crypto companies to thrive in a particular jurisdiction. Most of the activity remains in the exchange space, followed by the growth of ‘DeFi’ projects, which are often also governed by state money transmission rules. “
Miami has other advantages over other emerging crypto hubs, including Wyoming, which already has state laws supporting encryption, Hemang Subramanian, an 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 wealthy individuals are interested in financing innovation. In addition, “it is one of the largest financial centers in the country, with a large port and a huge population of expatriates 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 a hub for business, “particularly when digital currencies begin to take the Latin American market by storm.” Florida also lacks a state income tax, another advantage, he told Cointelegraph. But those advantages may still be incapable of transforming the city into a global encryption hub, even with favorable state legislation:
“Most of the serious legal work must happen at the federal level. Much of the current debate focuses on the fight against money laundering, international cooperation, and asset recovery and taxation. Wealthy people and companies in the [crypto] Space would do well to plan for government scrutiny and enforcement measures in these areas, rather than hold its breath for a quick fix in Miami. “
Lane Kasselman, Chief Commercial Officer of Blockchain.com, which recently announced it was moving its US headquarters from New York to Miami, was understandably optimistic about the company’s sunny new second home, telling Cointelegraph: “Miami is already the [new] Crypto Valley, and last week’s announcements prove it. “Mayor Suarez is acting as a vocal advocate for technology investment in the region, he added, and” Miami’s welcoming regulatory environment will help drive crypto innovation. “
Miami seen from the outside
What about the view from further afield? Thomas Nägele, a lawyer who played a role in the evolution of Crypto Valley, told Cointelegraph: “I think Miami is in a very good position to become a blockchain hub like Crypto Valley in Switzerland and the country of cryptocurrencies Liechtenstein.” , while adding several caveats:
“A blockchain hub is not something that can be simply imposed; it has to be supported by the community, it requires a certain number of companies active in this area and, last but not least, it needs legal clarity ”.
This last element, “legal clarity,” is of utmost importance, Nägele emphasized, and “the perfect example of that is Liechtenstein with its TVTG, also known as the Blockchain Law, which provides the legal framework for the tokenization of assets.”
Ian Simpson, senior manager of marketing and communication at Bitcoin Suisse AG, a Crypto Valley-based company, told Cointelegraph: “A challenge for larger cities and countries is that cryptocurrencies can be ‘absorbed’ by the most technological ecosystem. broad, and this can dilute the appeal of blockchain projects. “He added:” Close contact and access to ideas, talent and quality services are some of the things that have made Crypto Valley Switzerland what it is. to wait and see how things develop in Miami. “
When asked if Bitcoin 2021 should be viewed as a landmark event for the cryptocurrency and blockchain space, Simpson replied that while it was an inviting event, particularly after all the lockdowns of the past year, “it doesn’t seem to have marked any change. significant. or development in the community, and as we saw, it had no effect on the markets. “
Nägele, for his part, called it “a shame” that most European countries were on a quarantine list and could not join the Bitcoin 2021 meeting, “but what my friends were telling me, it was an incredible event. , and this is always the case. A good start for an ecosystem. ” While Kasselman commented, “There is no doubt that we have reached a critical tipping point where cryptocurrencies have moved from the niche to the mainstream,” he further explained to Cointelegraph:
“The remarkable thing is that the conference was not just about Bitcoin, but about the ecosystem: from DeFi to NFT to SushiSwap. Cryptocurrencies are an industry, not just one [single] very valuable token “.
A new center of gravity?
Overall, is it possible to identify the nerve center of the crypto / blockchain world, and if so, could it change? It can change from time to time, Nägele said, “depending on where attractive conditions exist for the relevant companies. Europe and especially Switzerland and Liechtenstein were certainly early adopters, and recently, Asia is catching up. I really look forward to welcoming Miami to the club, but ultimately, I hope that we will regard the world as the center of encryption. ”
Simpson added: “USA. It has a strong position in the blockchain and crypto space by virtue of its leadership in technology and with the recent IPO of Coinbase. However, Europe and Switzerland seem to offer more openness on the regulatory side, and the Asian ecosystem also carries a lot of weight by virtue of scale ”. But it is still difficult to target a single center of gravity in the blockchain ecosystem, he added.
Related: The speakers who impacted on Bitcoin2021 in Miami
“While the United States and Europe receive much of the press, Latin America and Asia show the fastest growth in retail users,” added Kasselman. “It is likely that as cryptocurrencies become more ubiquitous in financial services, we will see emerging markets accelerate adoption of major products and mature markets increase their use of the expanding crypto ecosystem.”
“I think Miami could easily be the crypto capital of America if it isn’t already,” Kelman noted. “However, without federal legislative support, it is impossible for Miami to become the international crypto capital,” and recent signs “point to more onerous federal legislation rather than crypto-friendly laws in the short term.”
Subramanian said that regulation always follows innovation, and “in a democracy, the ‘will’ of the people will eventually be fulfilled.” That is, the required state and federal legislation will eventually arrive. “If Zug in Switzerland can become a crypto-blockchain haven, Miami can too. It is more diverse, more international and much friendlier to capital, “he added.