Major City Investing One-Percent of Its Treasury in Crypto, Mulling Possible Bitcoin Tax Discount

Another major metropolis is jumping headfirst into the world of crypto by investing in the digital space and proposing discounts for citizens paying taxes in Bitcoin (BTC).

Rio de Janeiro, the South American city of almost 7 million people, now plans to invest 1% of its treasury funds into crypto.

According to Brazilian newspaper O Globo, Rio de Janeiro mayor Eduardo Paes announced the new investment strategy at Rio Innovation Week on Thursday.

Pedro Paulo, Rio’s secretary of finance, says the city may offer discounts to residents who pay their property taxes in Bitcoin.

“We are studying the possibility of paying taxes with an additional discount if you pay with Bitcoins.

You take the discount of the single quota of 7%, it would be 10% if you pay in Bitcoin.

Let’s study the legal framework so that we can do that.”

Paes spoke at the Rio Innovation event with Miami Mayor Francis Suarez, another mayoral BTC supporter.

Suarez has publicly attempted to position Miami as a hub for crypto. The South Florida city’s government voted in September to accept millions of dollars generated by MiamiCoin (MIA), the city’s very own digital asset.

First announced in June, crypto development company CityCoins Inc. launched the decentralized altcoin in August. MIA had generated more than $21 million in revenue as of November.

Suarez also announced in November that the South Florida city planned to develop digital wallets for users to receive Bitcoin payments derived from the MiamiCoin project. Users will have the ability to stake their MIA and receive passive Bitcoin dividend yields from the token, according to the mayor.

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Miami will hand out free Bitcoin to residents from profits on city coin

Every Miami resident with a digital wallet will be eligible to receive a Bitcoin dividend according to Mayor Francis Suarez. 

“We’re going to be the very first city in America to give Bitcoin yield as a dividend directly to its residents,” Suarez said in an interview on Nov. 11.

Citycoins launched the MiamiCoin cryptocurrency in August, which helps fund municipal projects by generating yield.

Staking MiamiCoin has generated yields in excess of $21 million for the city. Its reserve wallet converts MiamiCoin deposits into USD based on commands from city officials. Suarez said that if yields continue at that rate, it’s possible that they could entirely cover the city’s tax needs.

“Why don’t you just tax people less?”

However, residents will not have to own any MiamiCoin in order to be eligible for the free BTC.

“We’re going to create digital wallets for our residents,” said Suarez. “And we’re going to give them Bitcoin directly from the yield of MiamiCoin.”

He said the ultimate aim was to get Bitcoin into the hands of more and more people.

As far as local lawmakers go, Suarez is one of Bitcoin’s biggest proponents. Just last week, Suarez and New York City Mayor Eric Adams announced they were going to be accepting their next paychecks in Bitcoin. Their pledge was quickly matched by Jane Castor, the Mayor of Tampa Bay, Florida.

In February, Mayor Suarez announced plans to turn the City of Miami into a major cryptocurrency hub by enacting the “most progressive crypto laws.” Fittingly, this year’s Bitcoin conference was held in Miami, attracting the largest crowd in the annual event’s history.

Related: Civic engagement and crypto: Miami unveils its own digital coin

Following Suarez’s announcement, Miami Coin price jumped 18% to a daily high of $0.02369489 according to Coingecko.

Cointelegraph has reached out to the Mayor’s office for more information.