Rio de Janeiro, the 21st largest city by population, intends to convert a percentage of its treasury to crypto, according to a report from O Globo on Friday. “We are going to launch Crypto Rio and invest 1% of the Treasury in cryptocurrency,” said Mayor Eduardo Paes at Rio Innovation Week. O Globo says Mayor Paes planned to establish a working group on the topic as soon as last Friday (however, as of writing time, no decree has been issued).
The Brazilian city with 13.5 million inhabitants is calling the program “Crypto Rio.” In addition to converting 1% of its treasury, the city plans to apply discounts on tax payments made with 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% (of the IPTU), it becomes 10% if you pay in bitcoin,” explained Rio de Janeiro’s Finance Secretary Pedro Paulo.
Interestingly, Paes’s comments came during a conversation involving Francis Suarez, the mayor of Miami (a Bitcoiner himself). Last year, Suarez spearheaded a proposal to invest a percentage of Miami’s treasury into BTC. While the proposal passed, no funds have been allocated to crypto yet.
In related news, El Salvador, which invested heavily in Bitcoin during 2021 and recognized the cryptocurrency as legal tender, is coming under fire from Moody’s Investors Service, according to Bloomberg. El Salvador’s Bitcoin trades, which seem to come directly from President Nayib Bukele’s personal device, appear to be down roughly 14% based on the timing of Bukele’s purchase announcements.
Jaime Reusche, an analyst for Moody’s, told Bloomberg that El Salvador’s BTC trading is “quite risky, particularly for a government that has been struggling with liquidity pressures in the past.” Reusche notes that El Salvador’s current Bitcoin holdings of 1,139 BTC does not pose a significant threat to its debt obligations. However, Reusche says increased buying would induce “greater risk” to repayment capacity.
Notably, El Salvador faces an $800 million bond that matures in January 2023. Moody’s already downgraded El Salvador to a rating of Caa1, which judges El Salvador’s bond to be a “very high credit risk.”
Source: https://unchainedpodcast.com/walmart-and-crocs-go-web3/
