Eric Adams holding bitcoin
Photo illustration: Lev Radin/Pacific Press/LightRocket via Getty Images; Protocol

Where is the capital of crypto?

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Friday: New York versus Miami in a crypto showdown, the credit market's "invisible" consumers, and a16z's lobbying push.

Crypto and the city

Newly elected New York City Mayor Eric Adams quickly became known for a bold goal: He wants NYC to be more like Miami.

He doesn't envy the palm trees or beach resorts, but the way Miami has emerged as a major crypto hub. Adams said he wants to be paid in bitcoin and promised to "look at what's preventing the growth of bitcoin and cryptocurrency in our city."

He's particularly impressed with the fresh crypto trend in which Miami has emerged as the undisputed leader: the rise of city-based tokens.

Does crypto offer a new way to run and finance cities? In theory, maybe. But Adams' admiration for MiamiCoin, a token backed by the nonprofit CityCoins, may be overdone.

  • The idea of local currencies isn't exactly new. The Massachusetts Bay Colony issued its own currency in the 17th century, and local scrips proliferated during the Great Depression.
  • But as Patrick Stanley of CityCoins hastens to point out, Miami's not issuing a cryptocurrency. Community members who want to support the city are signing on to support it, with part of the currency they mine getting allocated to the designated municipality.
  • Miami actually had to vote on whether to accept it. The city council did so in September, gaining access to $4.3 million worth of MiamiCoin and becoming the first city to accept rewards from a city-based token.
  • Suarez has a grand vision for how crypto could mean "being able to run a government without the citizens having to pay taxes."
  • A reality check: That's a tiny sum for a city with a nearly $1.4 billion annual budget. Even if, as Miami Mayor Francis Suarez predicts, MiamiCoin generates around $60 million for the city over the next year, it would still be a small percentage of the overall fiscal picture.

So if it's not about the money, what's the point? Embracing experiments like municipal crypto is more about sending a message that a city is open to innovation.

  • As mayor of San Francisco, Ed Lee made a point of courting startups and their employees. It might be hard to picture now, but he was worried about whether the tiny companies with funny names like Twitter and Airbnb would stay in the city as they grew.
  • Lee was so successful that San Francisco's homegrown giants generated a tech backlash. But let's be honest: Having tech companies worth hundreds of billions of dollars and employing tens of thousands of employees is the kind of problem New York City and Miami would love to have.
  • Suarez and Adams both see crypto as a growth sector that could help establish or cement their city's role as growing tech hub that might rival San Francisco one day.
  • They're already competing for crypto companies: moved its headquarters from New York to Miami.
  • Could cities become more efficient by leveraging the blockchain for government data or collecting parking tickets in a local cryptocurrency? Sure, maybe. But they have much more to gain by attracting fast-growing companies that generate jobs and attract investment.

There's talk that New York might be CityCoins' next stop. If so, think about it less as a move to adopt a local cryptocurrency and more as — forgive us — a token gesture. It's all part of what Adams sees as some "friendly competition" with his Miami counterpart. "NYC is going to be the center of the cryptocurrency industry!" the mayor tweeted. "Just wait!"

As for San Francisco, we have some advice for Lee's successor, Mayor London Breed: She'd better start taking her salary in shiba inu coin. Or maybe floki.

— Benjamin Pimentel (email | twitter)


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"We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account." Mark Carney, former head of the Bank of England, who is leading United Nations Glasgow Financial Alliance for Net Zero.

"This is a classic case of asking the fox to design the henhouse."Rohan Grey, a lawyer and political adviser, on a16z's big crypto lobbying push.

3 questions for Shazia Virji, general manager for credit services at Credit Sesame

What fintech trend is most troubling for you?

With the fintech industry continuing to grow at a rapid pace, Congress is debating the regulations, or lack thereof, on the space. In other industries, regulations have often helped protect consumers, especially after big macroeconomic events such as The Great Recession. But too much regulation can stifle innovation and new solutions that fintech companies are looking to solve for the everyday consumer. By allowing for more flexibility, fintechs have proven that they can help consumers better than the traditional banks and traditional financial products available today.

What's been your biggest professional blunder, and how did it help you?

One of the ways we get to know our customers better is through qualitative user research. I was conducting my first customer interview and had a script in front of me of what to ask. Within the first 30 seconds, I realized that I was incredibly ignorant about the financial challenges and struggles this customer faced. As I delved into more customer interviews, it really humanized the impact I wanted to deliver to our members. It helped me approach all business decisions from a place of empathy and understanding rather than treating it like another check mark on a list of to-dos.

What problem would you like to see a fintech company solve?

There are 44 million credit-invisible consumers in the U.S. who have historically been locked out of the traditional credit and financial system. In today's economy, you need to have credit in order to get credit, which makes it incredibly difficult for these consumers to gain access to better financial opportunities. By leveraging alternative data, such as rent payments, we can better determine creditworthiness and open the doors to financial inclusion for the millions struggling to enter the credit system for the first time, and help them build credit faster.

Need to know

Cash App is now open for ages 13 and up. Parents or guardians must sign off, but then users can get a Visa debit Cash Card.

Payments tech giant FIS topped pre-pandemic levels. In its third-quarter earnings, FIS beat Q3 2019 global volume by 23% and transactions by 13%.

Square missed earnings expectations on a dip in bitcoin trading. Revenue was up, but crypto trading stalled. Robinhood was also hit by a drop in crypto trading in its most recent quarter.

Making moves

Bitfury hired former Binance U.S. head Brian Brooks as CEO. Brooks, who had once been acting head of the Office of the Comptroller of the Currency, jumped ship from Binance after four months. He's now heading the bitcoin mining company.

Alicia Tillman joined Capitolis as global chief marketing officer. She was previously global CMO at SAP and an executive at American Express. Capitolis provides software for banks and others to optimize financial resources.

FTX's U.S. unit hired Mark Wetjen as head of policy and lobbying. He was a commissioner at the Commodity Futures Trading Commission during Obama's presidency, alongside current SEC chair Gary Gensler, who chaired the CFTC at the time.

Ahu Chhapgar joined "buy now, pay later" provider Zip as CTO. He was previously vice president of digital payments tech at Mastercard.

Deal flow

HoneyBook is now valued at $2.4 billion. The software provider for small businesses and freelancers which embeds financial services in its offerings raised $250 million, led by Tiger Global Management.

Valon raised $50 million. The mobile-focused mortgage servicing startup's round was led by a16z.


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Data point

$100 billion: That's the amount corporations would save annually using central bank digital currencies, according to a report from Oliver Wyman and JPMorgan.

Thanks for reading — see you Tuesday!

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