Crypto in Florida: How it Started, Where it’s Going
Florida is one of the states that had people embracing cryptocurrency early on. The state went through a period where it could have been more crypto-friendly but has eased up regulations. Historical events for crypto have occurred here, including some of the first Bitcoin ATMs in 2014.
History of Cryptocurrency in FloridaCryptocurrency Regulations in Florida
On May 12, 2022, Florida’s governor signed new cryptocurrency legislation that made the state more friendly to crypto and clarified regulations. The bill went into effect on January 1, 2023.
Florida defines virtual currency as “a medium of exchange in electronic or digital format that is not a currency,” with a few exceptions. Tokens that a publisher issues that can only be used in an online game, a rewards program, or a consumer affinity program aren’t a virtual currency. Examples of virtual currency besides Bitcoin (BTC) are Ether (ETH), DogeCoin (DOGE), Shiba Inu (SHIB), and USD Coin (USDC).
Businesses that offer a virtual currency to the public engage in money service. Thus, you must follow Florida’s law regarding money service businesses (MSBs) if you start this type of venture.
Cryptocurrency exchanges still need a money transmitter license to operate in the state because they aren’t individual traders. Residents previously required a net worth of $100,000 to obtain this license. Retail crypto traders no longer need a money transmitter license.
Exchanges and intermediaries no longer need to hold the cash equivalent of crypto transmissions. They must, however, hold the crypto equivalent of the same type. Businesses have up to 10 business days of receiving payment to deliver the cryptocurrency to buyers. By law, money transmitters are also required to keep daily records of where all crypto is transmitted. Records must specify the type of crypto.
Crypto Businesses and Organizations in Florida
Ava Labs has an office in Miami as well as Brooklyn. Cornell computer scientists partnered with people from Wall Street to establish the company. Ava Labs simplifies the process of launching decentralized finance apps. It has raised $640 million in funding.
Xentavo, headquartered in Coral Gables, Fla., helps governments in small countries adopt crypto and blockchain technology. The company’s solutions to improve efficiency and public service delivery include document integrity, voting integrity, and a tamper-proof digital system of land ownership.
Mona Gallery is the first platform where people can buy metaverse worlds in Miami. Polygon, Protocol Labs, and Flamingo DAO are some of the company’s backers.
Blockchain Center, also in Miami, functions as an event venue, education center, and co-working space. It strives to fuel the adoption of blockchain technology throughout the city and state. So far, Blockchain Center has held 300 classes and 10,000 consultations. The company has another office in New York as well.
I/O Digital Research Foundation works to advance blockchain and AI technology. In July 2014, the non-profit organization launched an open-source blockchain project I/O Coin (IOC). It was initially a proof of work system but changed to proof of stake. Fintech recognized the organization as an emerging star in its Fintech100 Report.
Fidelity National Information Services, Inc., a Fortune 500 company headquartered in Jacksonville, launched a blockchain project called Fraud Freedom. It’s a chargeback indemnification service for cryptocurrency exchanges.
Governor DeSantis strives to transition the state into being able to accept tax payments in Bitcoin. At this point, the option is only intended for businesses.
Miami’s mayor Francis Suarez accepts some of his pay in Bitcoin. He also encourages crypto companies to set up in the city.
Donations in crypto are another trend in Florida. In 2020, a significant donor asked the Nicklaus Children’s Hospital Foundation to accept cryptocurrency donations. The foundation partnered with Giving Block to prepare itself for accepting crypto donations. Additional donations have been made since the initial one.
Using Cryptocurrency for Real Estate
Real estate is a hot market in Florida, and the state already sees cryptocurrency used in some transactions. Paul Lizell, a real estate investor and educator, used Bitcoin to pay the down payment on a home in Naples, Fla. He had used Bitpay, an app that immediately converts Bitcoin into USD. The USD value of his down payment at the time was $100,000.
The first home to be sold as an NFT in the US took place in Gulfport, Fla. An NFT is a digital asset on the blockchain that you can buy and sell with cryptocurrency. Some NFTs, such as in this instance, grant ownership of a physical item or asset. Your proof of ownership exists on the blockchain, although you would receive a title in a real estate transaction. The home sold for $655,000 through an auction. It was supposed to sell for $651,000, but a technical error that left the auction open for an hour longer resulted in a higher bid winning.
Jarrett Preston, a crypto business owner in Tampa, predicts that all major real estate companies will begin incorporating crypto transactions within five to six years.
Wolsen Real Estate in Sunny Isles Beach has already handled several real estate transactions with cryptocurrency. Jamie Chang, a real estate advisor in Naples, partnered with an artist to create an NFT to represent her condo listing. It generated more interested buyers, and the condo sold for $3.1 million. However, the seller wasn’t comfortable accepting payment in crypto, so it was paid for in cash.
A developer of waterfront property in Sarasota, Fla., said he was willing to consider offers in Bitcoin. The estimated value of the estate is $25 million. In Ocala, Fla., someone bought a five-acre estate for 74.6 ETH, equivalent to $999,999 at the time.
The Future of Crypto in Florida
An Invezz study names Florida the most crypto-ready state in the US for mass adoption. Factors analyzed include public interest in cryptocurrency, the number of Bitcoin ATMs and the number of crypto businesses into consideration when evaluating states.
Miami, in particular, is a hot spot for crypto lovers in Florida. It boasts 14.63 Bitcoin ATMs per 100,000 people. 3,187 BTC ATMs are in the state, ranking Florida third — behind Texas and California — in this category. The public interest in cryptocurrency is high in Miami too. Invezz found 210.28 Google searches for crypto topics per 1,000 people.
Florida doesn’t charge a capital gains tax, making it an attractive option for traders, investors, and businesses looking for a crypto-friendly place to live.
A challenge to crypto adoption is the regulatory uncertainty at a federal level. City leaders may also be too hasty to innovate with the desire to expand their economies, which could result in the passing of poor crypto policies.
Mining Bitcoin is an energy-demanding process that could strain the electrical grid and cause blackouts. Florida has a hot, humid climate. On top of that, the state regularly takes the first hit by hurricanes. Hurricane season runs from June to November, taking up half of the year. Miners might not want to deal with the risk of hurricanes causing power outages and property damage.
Despite these drawbacks, some people have set up mines in Florida because of its cheap electricity and supportive regulations. Some of the most significant Bitcoin mining operations are already in the state. Florida established a task force to attract more miners to the state. It’s expected that the number of miners in Florida will continue to increase.
Scams in the industry are another hurdle to mass adoption. Complaints about crypto scams have increased in recent years. The Consumer Financial Protection Bureau received 488 complaints in 2019, compared to 979 in 2020 and more than 1,400 in 2021. People new to cryptocurrency have a learning curve to know how to keep their crypto safe from hackers and scammers.
The cryptocurrency had a strong start in Florida, and although there was a bump in the road, it’s continuing along a positive trajectory. Many politicians, including the governor, are interested in how blockchain technology can improve the economy. Clear legislation has been enacted, and investors and traders don’t need to pay state capital gains taxes. The supportive climate will continue attracting crypto lovers to the state while making it easy for existing residents to adopt the technology.
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