The city of Berkeley plans to launch its municipal-backed cryptocurrency to help reduce its reliance on federal funding. In a show of might against the Trump administration, this city will be the first to make such a move in the United States. The idea is to have coins built on blockchain technology which will be accepted as legal tender in this city.
Berkeley is faced by a perennial problem of an increasing number of homeless people. The municipal believes that the creation of a digital coin will play a significant role in tackling this issue. Such a currency will be used to pay rent and donors can donate it to the homeless. Funds raised through an Initial Community Offering will be used to construct affordable housing projects for the population.
Initial Community Offering
In the case of Berkeley, the Municipal people believe that resistance is essential to survive the Trump administration. According to them, there’s no better way to show opposition than through floating a coin to its residents. The main difference between this offering and other ICOs is the fact that this is not pegged on future value but on a specific purpose that already exists.
Ideally, a city raises funds through the sale of municipal bonds. With this in mind, Berkeley intends to raise money from investors through an Initial Community Offering in which bonds built on blockchain technology will be on offer. The city hopes that the hype around cryptocurrencies will work in their favor and attract investors who believe that the idea can help solve the housing crisis.
It’s no secret that Berkeley has shown resistance to the Trump administration especially regarding immigration policies. Protests are a common occurrence in this city with residents showing their displeasure on various issues. The move by Trump’s government to hinder contractors from engaging in affordable housing has fueled the storm.
The signing of the tax bill in December translates to scarcity in housing projects. The number of homeless people is rising at an alarming rate. According to Berkeley’s city officials, floating a bond-backed coin will play a significant role in resolving this crisis.
Another thing that points to the necessity of such a cryptocurrency is the possibility of the government withdrawing federal funding from the city of Berkeley. Having a coin in place will cushion the city micro-economy from the massive impact of such a move. A lot is still in the pipeline in regards to developing this currency but it will be interesting to see whether other cities adopt this idea.