Confronted with significant cuts in federal funding, Berkeley, California, is looking to crypto tokens to finance services such as affordable housing.
Mayor Jesse Arreguin and Councillor Ben Bartlett have teamed up with San Francisco-based investment start-up Neighborly to promote an initiative that would split municipal bonds into microbonds and then sell them as tokens in an initial community offering.
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“Essentially, we would like to explore some new ways of financing because we have terrific needs, and we’re concerned about our ability to fulfill our moral and legal obligations for our residents here,” Bartlett said, according to CityLab, adding:
“The resistance requires a coin.”
Bartlett and Arreguin stated that the liquidation of bonds would enable people to invest in projects of their choice in small denominations. Meanwhile, transferring the buying and selling process to a blockchain would mean lower transaction costs and transparent city budgets.
Because the tokens are backed by the underlying bond, Bartlett says the initial community offering would be lower risk than a standard ICO.
Neighborly CEO Jase Wilson also said:”Berkeley is an extremely strong and fiscally disciplined borrower.”
The project’s sponsors hope that the sale of the microbond coins will ultimately enable them to finance affordable housing projects, but they plan to start with smaller projects such as the purchase of an ambulance for a fire station. They hope to hold their ICO in May.
“This municipal coin, this token, whatever you want to call it, it’s meant to…hopefully produce a really demonstrable new paradigm of shared prosperity,” Bartlett said.
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