New York residents are banned from trading their city's digital token dubbed NYCCoin, Bloomberg reports.
Citizens of the city can only mine the native coin and not buy and sell, as NYCCoin does not comply with existing BitLisense regulations. This is because none of the exchanges that procured BitLicense had listed the native cryptocurrency of New York Metropolis.
Because of this, New Yorkers can create coins through the mining process, but they cannot trade them on an exchange.
According to CityCoins developer Patrick Stanley, the characteristics of BitLicense "limit innovation". He further told Bloomberg:
"New York City is looking into how they could accept and use the funds, but if there is a lack of imagination, Miami is the model."
What is the BitLicense requirement?
New York's BitLicense regulatory regime is the most burdensome in the United States. The requirements, introduced in 2015 and touted as a national model, have failed spectacularly.
Digital currency businesses in New York currently need to apply for a BitLicense, which can take years to process. In other words, any activity related to digital assets, such as receiving cryptocurrencies for transmission, storing and holding cryptocurrencies, buying and selling cryptocurrencies, or performing exchange services, falls under the BitLicense regulations.
Because of this, many cryptocurrency-related companies have decided to get out of New York rather than undergo BitLicense.
For example, ShapeShift.io became the first digital currency company to announce its decision to leave the city for moral and ethical reasons rather than sharing customer details with the government.
Additionally, some of the largest cryptocurrency exchanges in the country, including Binance.US, Crypto.com, Kraken, Bitcoin system and FTX do not have the right to operate in New York City.
How is MiamiCoin different from NYCCoin?
Miami has been serious about becoming a major cryptocurrency center. As a result, City Mayor Francis Suarez moved all-in on Bitcoin and blockchain. He said that cryptography is "incredibly important" to the future of the city.
Launched in August 2021, MiamiCoin (MIA) is based on Stacks (STX), an open-source network of decentralized applications and smart contracts built close to the Bitcoin blockchain.
Mayor Suarez then announced that every Miami resident with a digital wallet would receive a Bitcoin dividend. However, CityCoins is an independent community, and the City of Miami does not own or own MiamiCoins.
MiamiCoin will allow citizens to mint NFTs, build applications and provide cryptocurrency payments. New Yorkers do not have a compliant way to buy tokens, as the coin is not available on any exchange that carries the required BitLicense for crypto purchases within the city.
New York residents who can't buy and sell their CityCoin is a setback for the city, which is looking to rival Miami as the leading crypto hub in the United States.