Lynne Sladky / AP; Patrick Smith / Getty Images
As Blockchain.com searched for a new home for its US headquarters, it decided to leave New York and move to downtown Miami.
“New York is a great city,” said Peter Smith, co-founder and CEO of the cryptocurrency company. “But Miami was an easy choice for us.”
Miami’s vibrant nightlife and warmer weather were certainly a draw, but according to Smith, the decision ultimately came down to the city getting better in line with the company’s goals.
“It’s the gateway to Latin America,” he says. “It’s on the east coast time zone. And more importantly, it’s probably the most enthusiastic city in the world about crypto right now.”
Cryptocurrencies are seen by many as the finance of the future, and Miami is aggressively trying to become the world’s crypto capital – in a direct threat to New York’s status as the country’s financial hub, and threatens New York’s dominance in finance.
Smith gives Mayor Francis Suarez the credit for raising the city’s profile. During its first period, Suarez has gone all in on Bitcoin and blockchain, the technology that underpins it.
Today, Miami has its own cryptocurrency, called MiamiCoin, and last year it hosted one of the world’s largest digital currency conferences.
“Crypto is incredibly important for the future of the city, and for how we position ourselves right now,” Suarez told NPR in a recent interview. “We’ve really created the epicenter of crypto.”
Welcome to Miami
Suarez has perfected the path he provides to investors and executives, such as Smith. First, he mentions Miami’s beaches, cultural offerings and professional sports teams. Then he comes to the real sale.
“There’s a difference in the cost of living, which is about two-to-one right now,” says Suarez. “Living in New York is twice as expensive as it is in Miami.”
According to the mayor, the city has reduced property taxes “to the second lowest level since the 1960s”, and it has more room for new development than New York. Suarez also proudly points out that the credit rating agency S&P Global Ratings recently upgraded some of its stance on some of Miami’s bond ratings.
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His strategy seems to be yielding results. The cryptocurrency companies FTX US, eToro and Bit Digital have announced plans to expand in Miami, and MoonPay and Orca Capital have established stores there.
And Miami attracts even more traditional finance companies. During the pandemic, Citadel Securities moved workers to South Florida, and private equity firm Apollo Global Management also opened a new office.
“We’ve moved around $ 1.2 trillion in assets under management to Miami over the last 16 months,” Suarez said.
New York: The city that never sleeps?
Miami’s success worries New York City’s elected mayor, Eric Adams, who fears that “the city that never sleeps” sleeps on crypto.
“NYC is going to be the center of the cryptocurrency industry and other fast-growing, innovative industries!” Eric Adams tweeted on election day. “Just wait!”
“In New York, we always go big, so I’ll take my THREE first paychecks in Bitcoin when I become mayor,” he proclaimed.
It created a bit of a stir and generated some headlines, but hours later it became clear that New York City can not pay employees in anything other than dollars. At least not right now. (Adams hopes to change the city’s wage policy, but in the meantime, a spokesman for the elected mayor says that Adams will convert his salary to bitcoin himself.)
Tiffany Smith, a New York-based partner at the law firm WilmerHale, which represents crypto companies, says the city has worked for it given that it has to deal with government regulations that are seen as unfavorable by anyone in the industry.
“New York had regulation that was unfavorable, or seen as unfavorable, to the crypto industry,” says Smith. “And that got a lot of companies going outside of New York.”
It was, says Smith, one of the first states to come out with a licensing regime.
State taxes are another obstacle, and one that Adams can not do much about. Unlike Florida, New York has a state income tax.
Angela Weiss / AFP via Getty Images
But New York City also has a lot going for it, says Smith. It is home to a thriving technology center and many world-renowned universities, including New York University, Columbia and Cornell Tech. And she says that crypto companies realize that there is an opportunity to recruit top talent from banks and other financial companies with headquarters there.
According to Smith, New York has all the ingredients, but “it’s a matter of putting it together and marketing and really reaching out to entrepreneurs and investors.”
Adams is betting on the fact that New York City is, well, New York City.
Crypto-founder Patrick Stanley welcomes the competition between the two cities that want to become “crypto capitals”. He is part of a loose collective called CityCoins that created MiamiCoin.
Stanley claims that the rivalry is a response to how attitudes have changed during the pandemic.
“People who work in information-based fields choose cities the way they choose products,” he says, adding that they are looking for leaders who are “technologically progressive.”
So far, Adams, who rejected NPR’s request for an interview, has not put forward any concrete proposals. But he has floated to add crypto to the curriculum of New York City Public Schools, and he says that if the city were to embrace crypto, it would lead to higher-paying jobs.
Adams becomes New York’s 110th mayor on January 1. Meanwhile, Suarez has some advice for him.
“Stand up,” he says. “There are many things to come. And listen, there is no shame in being number two.”