This Tuesday’s night, Berlekey City Council unanimously approved considering using blockchain technology to raise funds for their local financial needs.
The initiative came from Mr. Ben Bartlett who is the city’s Vice Mayor and Councilmember, but Mayor Jesse Arreguin fully supports it. This will be done in association with UC Berkeley’s Blockchain Lab and Neighborly, a local financial startup. The project has been baptized as the “Berkeley Blockchain Initiative.”
Mr. Bartlett aims for this project to enable the city to raise three million dollars. This will allow the city to afford a new fire engine for a start.
If the project works, the city will be aiming to issue an “undetermined amount of municipal bonds” utilizing blockchain services to attract investors that will support the city’s local developmental maintenance.
In an interview he gave recently, Mr. Bartlett said that issuing micro-bonds makes sense because that will enable the city to create bonds in the $10 to $25 range. That kind of bond is accessible for average citizens and investors, so the project’s overall viability increases significantly.
He explained his vision in further detail:
“It’s an exciting course for the market to be expanding in, particularly in light of what is happening with the creeping poverty. The idea is to issue micro-bonds via the blockchain and if the process allows it, we could go a step further and drive resources via a tokenized currency.”
The city’s council was indeed enthusiastic about the idea. Even so, Susan Wengraf, the Councilwoman remained skeptic about the whole thing as she said,
“I don’t know much about it, but I know it’s very unstable. The examples used by other communities successfully [issuing mini-bonds] was based on dollars – cash, not cryptocurrency. I would be very happy to support the first part of the proposal and [be] more skeptical about cryptocurrency.”
Changes this move will bring
If this initiative goes forward, the city of Berkeley will be the first one in US history to start their own blockchain-based fundraising program.
The advantages are apparent both in terms of politics and finances. Bringing together municipal finances with blockchain tech makes everything more efficient and transparent for the city, investors, and citizens.
It will also save some of the taxpayer’s money because going for the blockchain eliminates the need for middlemen, so many costs go down merely because commissions and other charges just don’t exist in the blockchain ecosystem.
Wrapping Up
This idea came about as the Berkeley City’s Council found itself in need to deal with possible financial punishment. Berkeley is a sanctuary city which means that, according to U.S. President Donald Trump’s declarations and plans for new immigration laws and rules, the city could lose a lot of federal resources just because it’s a sanctuary city.
Going for new funds by using the blockchain will help the city avoid financial problems and budget shortfalls caused by the presidential administration’s policies.