In an effort to stick it to the man and reduce its reliance on federal funding under the Trump administration, the city of Berkeley plans on issuing its own cryptocurrency.
“Initial Community Offering”
The city of Berkeley aims to become the first US city to have its own cryptocurrency ecosystem, in which coins or tokens backed by municipal bonds may be used as legal tender in shops and restaurants, to pay rent, or as donations to the city’s ever-growing homeless population. Additionally, money raised by the cryptocurrency will help create more affordable housing.
Berkeley City Council Member Ben Bartlett is one individual spearheading the charge, telling Business Insider:
Berkeley is the center of the resistance, and for the resistance to work, it must have a coin.
Bartlett is not alone. His powerful teammates include Berkeley Mayor Jesse Arreguín, the financial technology startup Neighborly, and the UC Berkeley Blockchain Lab. Together, they hope to launch their own Initial Coin Offering (ICO), which they are dubbing an “Initial Community Offering.”
Berkeley’s proposed cryptocurrency would essentially utilize blockchain technology as a means of selling municipal bonds. Traditionally, bonds aren’t the most attractive investment opportunity available, but Berkeley hopes the rising popularity of cryptocurrency will attract community-oriented investors worried about the city’s socioeconomic issues. Neighborly’s co-founder and COO Kiran Jain explains to Business Insider:
Unlike most of the ICOs which deliver coins for a future value or service, these coins will represent a real security issued for a specific purpose.
However, a lot of work is still to be done before a real Berkeley-backed cryptocurrency hits the blockchain, especially given the shaky-at-best reputation of ICOs at the moment. If successful, however, Berkeley’s venture could help legitimize both ICOs and cryptocurrency as a whole.
Sticking It to the Man
The city of Berkeley’s attempt at creating their own cryptocurrency comes as a response to President Trump’s December signing of the Republican tax bill, which discourages private contractors from constructing affordable housing by undercutting existing incentives.
As affordable housing in the city becomes increasingly scarce and homelessness increases at an alarming rate, Berkeley fears the long-term repercussions of the bill. According to city data, one percent of Berkeley’s population was homeless in 2017 — and a bond-backed cryptocurrency will hopefully help remedy that problem. Bartlett explained to Business Insider:
It’s actually enabling us to fulfill our duty as a government. Our duty is to provide for our people. It’s a violation of that duty to allow people to sleep in the streets.
As one of the first epicenters of the 1960’s counterculture, Berkeley has historically been a liberal capital of sorts in the US. The city hasn’t had a Republican mayor since 1971, and its residents frequently speak out against conservative political policies.
As such, Berkeley has unsurprisingly been one of the most vocally anti-Trump cities in the US, specifically in regards to the President’s immigration policies.
Tensions with the current administration continue to rise, particularly after President Trump vowed to pull federal funding from UC Berkeley in February 2017, following protests arising from a speech by political commentator Milo Yiannopoulos at the university.
If successful, the city of Berkeley could essentially use cryptocurrency to reduce their reliance on federal funding from the Trump administration.
What do you think about Berkeley’s goals of creating their own cryptocurrency? Do you think other cities could potentially combat homelessness by launching “Initial Community Offerings?” Let us know in the comments below!
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