Mar 1, 2021 - Economy & Business

Miami mayor: Bitcoin's appeal is that governments can't manipulate it

Miami Mayor Francis Suarez is pushing to make bitcoin a part of his city's economic future, and in an interview with "Axios on HBO," he pushed back against the economic orthodoxy of people like Treasury Secretary Janet Yellen who say it's a bad idea.

Why it matters: Miami's inclusion of bitcoin as a way to pay city employees or as part of the city's emergency cash holdings, as Suarez has proposed, would add legitimacy to the cryptocurrency and further entrench it in the U.S. economic system.

The big picture: Interest in bitcoin is largely coming from its parabolic price increase over the past year, but also from a rising distrust in government policymakers who have pushed U.S. money supply to extreme and unprecedented levels.

What he's saying: "For people who invest in bitcoin, the allure is precisely that: It's not backed by a central government. So it's not manipulatable by central government," Suarez told me during our interview.

  • "Obviously the federal government has the ability and the right to have their currency and to create the kind of policy that they believe will promote American values."
  • "And then, that's the beauty of capitalism, people get to decide whether they want to be on one train or on the other one."

Local officials have long questioned the wisdom of Washington and the Federal Reserve, but there has been little legitimate effort by major cities to move away from the U.S. dollar. However, it's a sentiment that's clearly growing.

  • "You always worry about the devaluation of the dollar, but the devaluation of the dollar is based oftentimes on what the government decides to do," Suarez says.
  • "It doesn't happen in a vacuum. It doesn't just happen. It happens when government takes certain action."

Where it stands: Already, Tesla — a trillion-dollar company headed by the world's richest man — has invested nearly 1/10th of its company's cash reserves into bitcoin.

  • Meanwhile, companies including Microstrategy, Square and even 151-year-old insurance giant MassMutual are also putting reserves into the completely unregulated asset.

The last word: Yellen last week called bitcoin "an extremely inefficient way of conducting transactions" and a highly speculative asset.

  • Suarez's response: "It doesn't surprise me at all that a Treasury secretary would find a decentralized potential currency ... to be hostile to a currency that they control."
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