According to Bloomberg, the city of Berkeley, California has launched an initiative to use blockchain technology for public funding of community projects.
Last night, the city council voted unanimously to request the city manager to consider a pilot program offering to sell municipal bonds using blockchain technology. The project, spearheaded by Vice Mayor Ben Bartlett, aims to introduce a new method of financing city infrastructure that will supposedly increase investment in communities by lowering the minimum bond price.
Barlett said the pilot would launch “micro-bonds” that would be issued in denominations ranging from $10 to $25. Generally, the minimum denomination of a municipal bond is $5,000. According to Bartlett, people can afford to pay $10 for a bond much easier than $5,000. Reducing the denomination will lead to the fact that investing in urban projects will become quite affordable for the average citizen.
The use of distributed registry technology will help register micro-bonds at the time of their issue. Bartlett added that if the initiative is approved, they could go even further and start supporting municipal projects using tokenized currencies. Advisor Susan Wengraf was skeptical of the idea, noting: "I don't know much about it, but I do know that they are very volatile. Other communities that have successfully issued micro-bonds work with the dollar, not cryptocurrency. I would be very happy to support the first part of the proposal, but not the crypto part." Berkeley began considering the possibility of issuing a municipal token in February, immediately after US President Donald Trump's tweet about it growing concern that the local university would lose federal funding. Berkeley is a sanctuary city, which means it does not cooperate with the federal government on immigration laws. The Trump administration recently threatened to cut off funding for sanctuary cities as part of its immigration reform.
City officials say issuing the Berkeley token will help the city avoid budget shortfalls that are a result of the current administration's policies.
According to https://cointelegraph.com
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