Last month, in partnership with a crypto community called CityCoin, the city of Miami began accepting donations through people investing in a crypto currency tied to their city. The city has already raised $7 million for projects and public services. UrbanTech sat down with the founder of the initiative to learn more.
JT: At the top, you could introduce yourself and share a little bit more about what you're working on and a little bit about CityCoins?
PS: Sure. My name is Patrick Stanley. I'm the founder of Freehold. We are contributing to this idea called CityCoins. So CityCoins is just a way for anyone to add cities to their portfolio. So CityCoins is built on open source technology. CityCoins are programmable tokens, meaning developers can build new functionality and utilities with their coins.
Interestingly each city will have its own coin and they'll receive 30% of all yield generated from activity on their protocol. And the first city is Miami.
JT: Could go a little bit more in-depth on how a coin tied to a city differentiates from maybe like an ICO or coins tied to other equities and go a little bit more into what that means on how projects can be supported and the yield and that piece?
PS: If your audience is familiar with ICOs, which were pretty popular in 2017. Essentially what happened during that time is that a project would come up with an idea they'd sell their coins in what is called an initial coin offering where they are the primary issuer of a security in all likelihood.
It's on that initial team to make things happen and grow their community. City coins have no ICO, no pre-mine they're launched in a completely fair way by the community. Unlike traditional tokens that are used for compute resources let's say unlike traditional tokens, which are either securities tokens, or purpose made for compute or file storage or things like that, CityCoins can actually do a lot more.
Instead of municipal debt, city coins are probably closer to something like municipal equity, however, they're programmable and they have a function that can be used essentially you can program smart contracts that automatically do specific computations when the specific coin is consumed.
There's a direct relationship between the market and the city itself because the market can effectively short a city or go along a city. So let's say for example, you really not loving what San Francisco, so you might want to sell your SFO coins and you might want to buy your Miami coins because you're more pro in the future of Miami as opposed to SF.
Now you have capital flight at the speed of light. It gets a signal like a signal of their interest or disinterest in what a city is doing.
JT: So in terms of traditional don't know, I'm thinking about economic development and from the city perspective, what kinds of projects, or I guess. Longer term when you're thinking about like building equity in a community, what types of prosperous outcomes do you see coming from this? Or are you hoping to see with the launch of this Coin?
PS: Sure. So I could see Wifi being subsidized for underprivileged homes. I could see startups being recruited into the geographic area so that they can subsequently be taxed traditionally.
I could see disaster relief. This is just an additional revenue stream for the city to do with it, what they will. I do see over this next decade and a half a new sort of archetype of mayor emerging. The Archetype is effectively the CEO of the city. Most mayors in most cities have been around for a long time.
And most mayors are inheriting the job of operating the city successfully. And I think the mayor that we're going to see and the city officials that we're going to see over this next decade and a half are going to be those that are very much online on Twitter.
They're operating in public and the markets are essentially condoning or disapproving of what they're doing in real time. This new archetype of CEO and the city, I think is actually going to be a real one where cities compete for customers or citizens and visitors where they previously didn't.
Before 2020, most people knew they were like they can move around, but now we really know for information workers we can live anywhere within a few times zones. So you have a lot of choice in terms of where you live, your physical body can move very easily and your assets should be able to move just as easily.
That old phrase think globally, act locally. That phrase is actually a pretty limiting phrase. And the reason it existed was that most people lived their lives through the lens of immobility rather than mobility. And so because of this, I think you're going to start seeing CEOs of the city or mayors on Twitter, competing for new residents, and upholding ideals that attract residents that are essentially their customers.
JT: Yeah, no, that's a really interesting point and I think that's a perfect kind of lead-up. I'm curious why you chose Miami for the first CityCoin?
PS: You tell me why you think we did Miami because I'd love to hear.
JT: Yeah. So from my perspective, I think. Miami is an interesting city and south Florida more generally the region. I think it's a business-friendly state. That has a warm-weather climate. So I think there's a lot of attractiveness for mid-level employees, tech workers, knowledge workers, who are either thinking about starting companies who felt tied to be in big localities, like New York, San Francisco, where more traditional venture capital has been.
Miami's mayor Suarez has done a great job marketing the city as a new enclave for tech workers and trying to foster that relationship with people.
I'm not as familiar with the crypto or blockchain assets, but it seems like one of the cities leading on the forefront building relationships with that sector..
I'm not sure if I've seen a city necessarily build relationships with crypto or blockchain quite in that same way. I think New York, there's a bunch of FinTech and by proxy of wall street and financial capital, but Miami is almost directly tried to build that relationship.
PS: I'd say yeah, you hit the nail on the head. I think the community is really excited about Miami first for all those reasons, great business, climate, warm weather, cultural diversity of thought technologically progressive, as opposed to technologically regressive.
It seems like the city wants to make all its citizens better off and not just some. If you were to answer anthropomorphize a city into a human being, Miami also has the highest self-esteem of any city in the world right now, because of what they've pulled off in 2020 and 2021, which is essentially siphoning out of the Bay Area, but also recruiting a lot of those knowledge workers, as you were mentioning directly to the city.
Other cities could fit the bill too for different reasons like New York, as you mentioned, however, New York is digging itself out of a little bit of a crypto whole cause they have the bit license, which was just terrible law brought into existence by a rent-seeking district attorney, who should be ashamed for what he had done. It's truly despicable and new city officials like Eric Adams seem to have their eye on making New York, the capital of capital again where it's not actually in the crypto world, it's not a done deal that New York is the center of finance.
In fact, most of the crypto world operates outside of New York and outside of San Francisco. So it's it truly is a decentralized ecosystem. And when you have new digital assets that have provable digital scarcity, where once they didn't exist you essentially have the conditions for a new financial system to be created.
Like Miami, I feel, and the community feels we'll get the job done and essentially be progressive. I do think every startup city will have its own CityCoin. So you'll have Tel Aviv will have its own city point. Lagos' Nigeria will have its own coin. El Salvador, a nation that has made Bitcoin it's one of its reserves currencies.
The list goes on and essentially all these startups cities will be trying to attract startup capital, crypto capital specifically, and they'll do so by leveraging the market. Not only within their city, but outside of the city as well. So let's say, for example, I want to have the right to move to Lisbon, Portugal, and live there six months out of the year or seven months out of the year.
I might want to own a bunch of Lisbon coins. Yeah. I might want to own a lot actually. The reason being is maybe five, 10 years from now, I want to be able to present to the city, “hey I've indirectly subsidized this amount of your ongoing revenue as a function of this protocol and therefore I can make a case for reducing my taxes or expediting citizenship or something that is super high impact.
From a developer standpoint, you can just build cool stuff. So this is a whimsical idea, and there are a lot more practical ideas that are useful, but imagine like a proof of holding or holding access control mechanism to digital spaces or even physical spaces you could get, you could have an apartment network all over the world that's accessible only by Miami Coin holders.
Geography becomes less relevant in that scenario, you have more of it's more like an idea. Ideology almost has more importance in that scenario.
And you could leave in another sort of actual, like half whimsical, half practical idea is terraforming new cities that didn't even exist before. So imagine starting a city in the cloud and let's just call it like VR.
I'm just using it as an example, but so it's all about virtual reality and the idea is we're going to find a plot of land in a beautiful area with conditions that we like, and we're going to subsidize all the development of infrastructure, roads, plumbing, electricity, wifi all that stuff.
The idea is anyone with that coin can actually reserve a plot of land in that town. They just have to show that they own it. And they also have to prove that they're going to develop out their property within a given amount of years. So an actual town around that ideology forums.
JT: Yeah, no, this is really interesting, cause I know I've been following crypto and blockchain emergence into the built environment and kind of the physical world for a while now. And I, it was a big deal. I think when like the first real estate transaction was done using crypto and it felt like it was more contract-based, but this really like you described us feel like with Citi coins, it's a much more practical model for.
I think that geography example and kind of point that you made, there's a much more rooted tie to communities because something that I see and maybe, I don't know, I think about as use cases. It's almost like each individual city could have its own coin as a way to focus on projects because they think you see a lot of times. The with sprawl, you see a lot of inefficiency across government and a lot of services that they're either privatized or shared a little bit more.
PS: The cool thing about city coins is they are publicly accessible. Publicly programmable Bitcoin yielding digital assets and anyone from a standing start and mind them, or purchase them or program with them.
It just completely opened membership access. I see them as public goods and they'll exist for eternity. Essentially. You have to basically kill the blockchain which is pretty hard to do, especially when that's anchored the Bitcoin. The other thing too is I think most people like don't hold municipal. It's mostly just like sovereigns and institutions. If you're living in New York, you rent an apartment, you go to your job on the really crappy subway system. That's overheated and not modernized. And you're on your phone the whole time.
It's probably distracting you from the fact that you're on a hundred-year-old subway system and you really don't really have a way to have a stake in the city's success.
Whereas city coins are much more positive something you can have some ownership in the idea of the city doing well over time. I think that's really accessible for all people. Pennies or dime's worth of your respective coin to just signal that you're you might not have much money, but at least you can signal that you're pro this city and have some civic pride, and also are there for some upside if there is an upside and they're along for the highs and the lows essentially have more skin in the game.
JT: Yeah, no, I cover housing a lot and I feel like for the 20th century, the way. Proved you had skin in the game for our city was you typically bought a house, but in cities like New York or Los Angeles, or that's not always possible, I feel like city coins. It's a way for renters and people who have largely not been able to invest in their communities to get that stuff.
What other kinds of cities I know you mentioned in theory of the ones that we could see, but what kinds of cities are you seeing that are made that would maybe show interest in a CityCoin outside of Miami?
PS: I mean like the community is hacking away on this stuff. Creating the conditions for new cities to pop up, but we'll say the community has seen outreach from cities in the United States, South America, Saudi Arabia, New Zealand.
There's not even been a project that's launched yet. So I think that's pretty compelling. In terms of the demand for the. From cities all around the world. And I think cities will actually like a city is going to do this, whether it's Miami or other cities, I think there's like a fiduciary duty to do it.
But the most competitive cities I think are gonna be the ones that really benefit from this. And so I think competitive cities are essentially typified b characteristics of acting like a startup, constantly recruiting, constantly fundraising, constantly selling. And you look at Mayor Suarez.
He's that archetype now. Mayor Suarez is a very interesting character. He doesn't actually have executive authority on many things. He's a representative mayor and there's like checks and balances within Miami that essentially don't allow the mayor of Miami proper to do whatever the heck they want at any given time.
However, what he's shown is that the few levers he can pull, which are promoting Miami as a place where people should come and build. Essentially doing good work, good deeds, publicly letting the community know he cares provably, proving his impact, being transparent. I think all that stuff has attracted so many people to Miami that would never have considered moving to Miami before they might've considered moving to Utah or Austin.
JT: There's a lot of mayors who are looking at the opportunity even during COVID to make their cities competitive for this next generation of tech talent and startups.
So my last question, what didn't I ask you that I should have? What do you want to leave the urban tech audience with what a insight or anything about city coins? Should they know?
PS: Any city can launch a CityCoin. I'll say like maybe one of the questions is aside from the programmability, what do the economics look like for a city?
This isn't necessarily guaranteed just as an estimate. A city gets to a billion dollars market cap. They're potentially earning yield in the range of 30 million, 250 to $200 million just depending on the life cycle of the coin where they're at that point if they get to five to $10 billion market cap, which is I don't know that's like a top 30 cryptocurrency.
I think a city will get there. Like I feel like a high confidence rate at that. Some city will get there. It may not be the first, but it will be some city. They can effectively subsidize their entire tax obligation on an annual basis, which I find very fascinating, the ability to wean yourself off of taxing your residents, issuing debt, taxing your residents.
Last month, in partnership with a crypto community called CityCoin, the city of Miami began accepting donations through people investing in a crypto currency tied to their city. The city has already raised $7 million for projects and public services. UrbanTech sat down with the founder of the initiative to learn more.
JT: At the top, you could introduce yourself and share a little bit more about what you're working on and a little bit about CityCoins?
PS: Sure. My name is Patrick Stanley. I'm the founder of Freehold. We are contributing to this idea called CityCoins. So CityCoins is just a way for anyone to add cities to their portfolio. So CityCoins is built on open source technology. CityCoins are programmable tokens, meaning developers can build new functionality and utilities with their coins.
Interestingly each city will have its own coin and they'll receive 30% of all yield generated from activity on their protocol. And the first city is Miami.
JT: Could go a little bit more in-depth on how a coin tied to a city differentiates from maybe like an ICO or coins tied to other equities and go a little bit more into what that means on how projects can be supported and the yield and that piece?
PS: If your audience is familiar with ICOs, which were pretty popular in 2017. Essentially what happened during that time is that a project would come up with an idea they'd sell their coins in what is called an initial coin offering where they are the primary issuer of a security in all likelihood.
It's on that initial team to make things happen and grow their community. City coins have no ICO, no pre-mine they're launched in a completely fair way by the community. Unlike traditional tokens that are used for compute resources let's say unlike traditional tokens, which are either securities tokens, or purpose made for compute or file storage or things like that, CityCoins can actually do a lot more.
Instead of municipal debt, city coins are probably closer to something like municipal equity, however, they're programmable and they have a function that can be used essentially you can program smart contracts that automatically do specific computations when the specific coin is consumed.
There's a direct relationship between the market and the city itself because the market can effectively short a city or go along a city. So let's say for example, you really not loving what San Francisco, so you might want to sell your SFO coins and you might want to buy your Miami coins because you're more pro in the future of Miami as opposed to SF.
Now you have capital flight at the speed of light. It gets a signal like a signal of their interest or disinterest in what a city is doing.
JT: So in terms of traditional don't know, I'm thinking about economic development and from the city perspective, what kinds of projects, or I guess. Longer term when you're thinking about like building equity in a community, what types of prosperous outcomes do you see coming from this? Or are you hoping to see with the launch of this Coin?
PS: Sure. So I could see Wifi being subsidized for underprivileged homes. I could see startups being recruited into the geographic area so that they can subsequently be taxed traditionally.
I could see disaster relief. This is just an additional revenue stream for the city to do with it, what they will. I do see over this next decade and a half a new sort of archetype of mayor emerging. The Archetype is effectively the CEO of the city. Most mayors in most cities have been around for a long time.
And most mayors are inheriting the job of operating the city successfully. And I think the mayor that we're going to see and the city officials that we're going to see over this next decade and a half are going to be those that are very much online on Twitter.
They're operating in public and the markets are essentially condoning or disapproving of what they're doing in real time. This new archetype of CEO and the city, I think is actually going to be a real one where cities compete for customers or citizens and visitors where they previously didn't.
Before 2020, most people knew they were like they can move around, but now we really know for information workers we can live anywhere within a few times zones. So you have a lot of choice in terms of where you live, your physical body can move very easily and your assets should be able to move just as easily.
That old phrase think globally, act locally. That phrase is actually a pretty limiting phrase. And the reason it existed was that most people lived their lives through the lens of immobility rather than mobility. And so because of this, I think you're going to start seeing CEOs of the city or mayors on Twitter, competing for new residents, and upholding ideals that attract residents that are essentially their customers.
JT: Yeah, no, that's a really interesting point and I think that's a perfect kind of lead-up. I'm curious why you chose Miami for the first CityCoin?
PS: You tell me why you think we did Miami because I'd love to hear.
JT: Yeah. So from my perspective, I think. Miami is an interesting city and south Florida more generally the region. I think it's a business-friendly state. That has a warm-weather climate. So I think there's a lot of attractiveness for mid-level employees, tech workers, knowledge workers, who are either thinking about starting companies who felt tied to be in big localities, like New York, San Francisco, where more traditional venture capital has been.
Miami's mayor Suarez has done a great job marketing the city as a new enclave for tech workers and trying to foster that relationship with people.
I'm not as familiar with the crypto or blockchain assets, but it seems like one of the cities leading on the forefront building relationships with that sector..
I'm not sure if I've seen a city necessarily build relationships with crypto or blockchain quite in that same way. I think New York, there's a bunch of FinTech and by proxy of wall street and financial capital, but Miami is almost directly tried to build that relationship.
PS: I'd say yeah, you hit the nail on the head. I think the community is really excited about Miami first for all those reasons, great business, climate, warm weather, cultural diversity of thought technologically progressive, as opposed to technologically regressive.
It seems like the city wants to make all its citizens better off and not just some. If you were to answer anthropomorphize a city into a human being, Miami also has the highest self-esteem of any city in the world right now, because of what they've pulled off in 2020 and 2021, which is essentially siphoning out of the Bay Area, but also recruiting a lot of those knowledge workers, as you were mentioning directly to the city.
Other cities could fit the bill too for different reasons like New York, as you mentioned, however, New York is digging itself out of a little bit of a crypto whole cause they have the bit license, which was just terrible law brought into existence by a rent-seeking district attorney, who should be ashamed for what he had done. It's truly despicable and new city officials like Eric Adams seem to have their eye on making New York, the capital of capital again where it's not actually in the crypto world, it's not a done deal that New York is the center of finance.
In fact, most of the crypto world operates outside of New York and outside of San Francisco. So it's it truly is a decentralized ecosystem. And when you have new digital assets that have provable digital scarcity, where once they didn't exist you essentially have the conditions for a new financial system to be created.
Like Miami, I feel, and the community feels we'll get the job done and essentially be progressive. I do think every startup city will have its own CityCoin. So you'll have Tel Aviv will have its own city point. Lagos' Nigeria will have its own coin. El Salvador, a nation that has made Bitcoin it's one of its reserves currencies.
The list goes on and essentially all these startups cities will be trying to attract startup capital, crypto capital specifically, and they'll do so by leveraging the market. Not only within their city, but outside of the city as well. So let's say, for example, I want to have the right to move to Lisbon, Portugal, and live there six months out of the year or seven months out of the year.
I might want to own a bunch of Lisbon coins. Yeah. I might want to own a lot actually. The reason being is maybe five, 10 years from now, I want to be able to present to the city, “hey I've indirectly subsidized this amount of your ongoing revenue as a function of this protocol and therefore I can make a case for reducing my taxes or expediting citizenship or something that is super high impact.
From a developer standpoint, you can just build cool stuff. So this is a whimsical idea, and there are a lot more practical ideas that are useful, but imagine like a proof of holding or holding access control mechanism to digital spaces or even physical spaces you could get, you could have an apartment network all over the world that's accessible only by Miami Coin holders.
Geography becomes less relevant in that scenario, you have more of it's more like an idea. Ideology almost has more importance in that scenario.
And you could leave in another sort of actual, like half whimsical, half practical idea is terraforming new cities that didn't even exist before. So imagine starting a city in the cloud and let's just call it like VR.
I'm just using it as an example, but so it's all about virtual reality and the idea is we're going to find a plot of land in a beautiful area with conditions that we like, and we're going to subsidize all the development of infrastructure, roads, plumbing, electricity, wifi all that stuff.
The idea is anyone with that coin can actually reserve a plot of land in that town. They just have to show that they own it. And they also have to prove that they're going to develop out their property within a given amount of years. So an actual town around that ideology forums.
JT: Yeah, no, this is really interesting, cause I know I've been following crypto and blockchain emergence into the built environment and kind of the physical world for a while now. And I, it was a big deal. I think when like the first real estate transaction was done using crypto and it felt like it was more contract-based, but this really like you described us feel like with Citi coins, it's a much more practical model for.
I think that geography example and kind of point that you made, there's a much more rooted tie to communities because something that I see and maybe, I don't know, I think about as use cases. It's almost like each individual city could have its own coin as a way to focus on projects because they think you see a lot of times. The with sprawl, you see a lot of inefficiency across government and a lot of services that they're either privatized or shared a little bit more.
PS: The cool thing about city coins is they are publicly accessible. Publicly programmable Bitcoin yielding digital assets and anyone from a standing start and mind them, or purchase them or program with them.
It just completely opened membership access. I see them as public goods and they'll exist for eternity. Essentially. You have to basically kill the blockchain which is pretty hard to do, especially when that's anchored the Bitcoin. The other thing too is I think most people like don't hold municipal. It's mostly just like sovereigns and institutions. If you're living in New York, you rent an apartment, you go to your job on the really crappy subway system. That's overheated and not modernized. And you're on your phone the whole time.
It's probably distracting you from the fact that you're on a hundred-year-old subway system and you really don't really have a way to have a stake in the city's success.
Whereas city coins are much more positive something you can have some ownership in the idea of the city doing well over time. I think that's really accessible for all people. Pennies or dime's worth of your respective coin to just signal that you're you might not have much money, but at least you can signal that you're pro this city and have some civic pride, and also are there for some upside if there is an upside and they're along for the highs and the lows essentially have more skin in the game.
JT: Yeah, no, I cover housing a lot and I feel like for the 20th century, the way. Proved you had skin in the game for our city was you typically bought a house, but in cities like New York or Los Angeles, or that's not always possible, I feel like city coins. It's a way for renters and people who have largely not been able to invest in their communities to get that stuff.
What other kinds of cities I know you mentioned in theory of the ones that we could see, but what kinds of cities are you seeing that are made that would maybe show interest in a CityCoin outside of Miami?
PS: I mean like the community is hacking away on this stuff. Creating the conditions for new cities to pop up, but we'll say the community has seen outreach from cities in the United States, South America, Saudi Arabia, New Zealand.
There's not even been a project that's launched yet. So I think that's pretty compelling. In terms of the demand for the. From cities all around the world. And I think cities will actually like a city is going to do this, whether it's Miami or other cities, I think there's like a fiduciary duty to do it.
But the most competitive cities I think are gonna be the ones that really benefit from this. And so I think competitive cities are essentially typified b characteristics of acting like a startup, constantly recruiting, constantly fundraising, constantly selling. And you look at Mayor Suarez.
He's that archetype now. Mayor Suarez is a very interesting character. He doesn't actually have executive authority on many things. He's a representative mayor and there's like checks and balances within Miami that essentially don't allow the mayor of Miami proper to do whatever the heck they want at any given time.
However, what he's shown is that the few levers he can pull, which are promoting Miami as a place where people should come and build. Essentially doing good work, good deeds, publicly letting the community know he cares provably, proving his impact, being transparent. I think all that stuff has attracted so many people to Miami that would never have considered moving to Miami before they might've considered moving to Utah or Austin.
JT: There's a lot of mayors who are looking at the opportunity even during COVID to make their cities competitive for this next generation of tech talent and startups.
So my last question, what didn't I ask you that I should have? What do you want to leave the urban tech audience with what a insight or anything about city coins? Should they know?
PS: Any city can launch a CityCoin. I'll say like maybe one of the questions is aside from the programmability, what do the economics look like for a city?
This isn't necessarily guaranteed just as an estimate. A city gets to a billion dollars market cap. They're potentially earning yield in the range of 30 million, 250 to $200 million just depending on the life cycle of the coin where they're at that point if they get to five to $10 billion market cap, which is I don't know that's like a top 30 cryptocurrency.
I think a city will get there. Like I feel like a high confidence rate at that. Some city will get there. It may not be the first, but it will be some city. They can effectively subsidize their entire tax obligation on an annual basis, which I find very fascinating, the ability to wean yourself off of taxing your residents, issuing debt, taxing your residents.
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