In an exclusive interview with the Brazilian portal Boletim Bitcoin, Andrea Senko, Rio de Janeiro's secretary of finance and planning, commented on the city's adoption of bitcoin and cited the likely purchase of bitcoin for the city government's coffers.
RIO DE JANEIRO AND BITCOIN
For some months now, Rio de Janeiro's city government has been getting closer to bitcoin. On a number of occasions, city representatives, such as Mayor Eduardo Paes, have commented on their plans.
During Rio Innovation Week, Eduardo Paes met with Miami Mayor Francis Suarez, who is looking to integrate bitcoin in Miami. Paes stated that Miami is one of the inspirations for Rio de Janeiro and later said that the city was studying “applying 1% of the treasury to cryptocurrency.”
During the event, Pedro Paulo, secretary of finance, also stated that the city government is open to receiving tax payments in bitcoin. Paulo said, “We are studying the possibility of paying taxes with an additional discount if you pay with bitcoins.” This would encourage the use of bitcoin as payment.
PLANS FOR THE CITY
When asked about the idea of the city integrating bitcoin, Senko highlighted it as a pillar of Rio de Janeiro's technological growth.
"Rio, because of its vocation as a global city, is aware of the world's main changes and innovations, and always places itself at the forefront of these issues. The city looks to the future, and the City Hall has been following the technological and economic advances [...]. The goal is to make Rio the crypto ecosystem of Brazil, contributing to the city becoming the innovation and technology capital of the country. "
To help with the integration, Rio de Janeiro's city government created the Municipal Committee for Crypto Investments (CMCI). When asked about the activities under discussion by the institution, the Finance Secretariat stated:
“The Municipal Committee for Cryptoinvestments (CMCI), established in March 2022, works on a policy for investment in crypto assets and a governance model for decision making.”
Senko commented on the idea of the city allocating 1% of the mayor's treasury in bitcoin:
“This purchase will follow a methodology that is attentive to the swings and risks of this market and is under development by City Hall.”
On the adoption of Bitcoin by El Salvador and the Central African Republic, Senko said it is “positive that the country is open to the crypto asset market.”
Despite the Rio de Janeiro representative's positive statements about bitcoin adoption, it was reported that no other local municipality has contacted her to jointly study the possibility:
"To date, we have not been approached by other public entities to study this possibility together with Rio de Janeiro. "
Despite the isolated initiative at the municipal level in Rio de Janeiro, Brazil is following a positive regulatory path for bitcoin adoption. In May of this year, the Brazilian government published a resolution that zeroes the tax on the import of equipment for bitcoin mining, as long as the activity is done with renewable energy.
Due to the hot tropical climate and economic conditions that are not very favorable for the activity, large-scale mining is practically nonexistent in the country. However, the change in legislation could unlock a gigantic market since the country of more than 210 million people has a predominantly green energy matrix, coming mainly from hydroelectric plants.
CITIES AND BITCOIN
In the last year, a number of cities have begun to integrate in different ways with bitcoin, in what seems to be the beginning of a modest adoption by governments.
In March 2022, the city of Lugano, Switzerland, established bitcoin as a legal currency, as well as making a commitment to becoming an educational hub for the cryptocurrency.
In addition, Lugano will host the Plan B Forum, an event focused on discussing the global adoption of bitcoin and the defense of free speech.
The city government of Fort Worth was the first city in the United States to start a bitcoin mining operation. Through a grant from the Texas Blockchain Council, an institution focused on mining advocacy in the state, three mining platforms were installed in the city's Information Technology Solutions Department.
"With blockchain technology and cryptocurrency revolutionizing the financial landscape, we want to transform Fort Worth into a tech-friendly city," said Mayor Mattie Parker.
Probably the most notorious case of a city adopting bitcoin is Miami, which is serving as an inspiration for Rio de Janeiro. Through a series of initiatives by Mayor Francis Suarez, the city is incorporating bitcoin into its local economy.
During the Rio Innovation Week event, Francis Suarez reaffirmed his commitment that taxes can be paid in bitcoin:
"I see very quickly a world where the Satoshi system is what is used to make payments; we need to make that leap," the mayor said. "We need people to understand that bitcoin is increasing in value and yes, we want you to have bitcoin, a better currency, frankly."
In this way, cities begin to spontaneously integrate with bitcoin. Its network effect and success in becoming a sovereign store of value could radically change which regions adopt it first.
Miami, Rio de Janeiro, Lugano, El Salvador and other regions are taking the lead in global bitcoin adoption in what might be called the “Digital Gold Rush.”
Should bitcoin become the dominant money, the wealth provided by a bitcoin standard has the potential to transform these regions into the world's new financial and technological capitals, driven by the use of sound money and the adoption of revolutionary technology.