Californian City Thinking of Launching Its Own Cryptocurrency
The city of Berkeley, California is thinking of launching its own initial coin offering (ICO) in an effort to depend less on federal funding. The ICO will raise funds by selling tokens that would be backed up by government municipal bonds.
These tokens could be spent at retail outlets or for general living expenses, such as rent.
Governments usually sell municipal bonds for financing new projects, and some in in Berkeley’s administration hope this implementation in blockchain technology will make this project more appealing to residents who already are bitcoin investors.
But introducing a viable cryptocurrency for real- world transactions is quite difficult. Only a handful of businesses in US accept cryptocurrency as a form of payment, and several platforms that used to accept bitcoin now no longer support it because of price fluctuations and high transaction fees.
This ambitious project comes in response to the recent announcement of future tax cuts. The administration has repeatedly said that it will cut funding to „sanctuary cities” such as Berkeley.
“Berkeley is the centre of the resistance, and for the resistance to work, it must have a coin,” said Berkeley City Council Member Ben Bartlett to Business Insider.
They hope this will provide a means through which residents can invest in their local community and that the funds raised will help support more affordable housing.
But according to Bartlett, this idea is still discussed, but if the budget for affordable housing shrinks, the city will try to implement this solution. If this concept goes past its discussion for approval, the ICO could be launched as early as May.
This is not the only case in which ICOs and cryptocurrencies have been used for helping citizens.
Venezuela called support for a state- backed cryptocurrency in an attempt to alleviate the effects of an ongoing economic crisis. The cryptocurrency, called Petro, would be backed by oil, gas, diamonds, and gold.
If their plan proves successful, Berkeley could map out what could serve as a solution to citizens that are suffering from an economic crisis or government fund cuts.