The city of Berkeley wants in on the cryptocurrency mania
The city of Berkeley, California is considering launching an initial coin offering (ICO) in a stated effort to reduce its dependence on federal funding. The ICO would raise funds by selling digital coins that would be backed by government municipal bonds, according to Business Insider, which spoke to a Berkeley city council member who described the plan.
Governments ordinarily sell municipal bonds to finance new projects, and some in Berkeley’s government hope the addition of blockchain technology will make the venture more appealing to residents who might already be bitcoin investors. In theory, coin holders might also use the cryptocurrency within the local economy.
Introducing a viable cryptocurrency for real-world transactions is ambitious, to say the least: only select businesses in the US currently accept cryptocurrency as a form of payment, and several platforms that previously accepted bitcoin now no longer support it due to its price volatility and high transaction fees.
The initiative was launched in response to the Trump administration’s recent tax cuts — the administration has made repeated threats to cut funding to “sanctuary cities” such as Berkeley. “Berkeley is the center of the resistance, and for the resistance to work, it must have a coin,” council member Ben Bartlett said to BI.
Bartlett teamed up with Berkeley’s mayor, Jesse Arreguín, UC Berkeley’s Blockchain Lab, and the start-up Neighborly to attempt to plan out an ICO. They hope any funds raised will help fuel more affordable housing to combat any side-effects of the new tax bill.
The Trump administration has an antagonistic relationship with the well-known liberal municipality. Over Twitter, Trump personally threatened to pull federal funding from UC Berkeley last February, after protests erupted over alt-right figure and Breitbart News editor Milo Yiannopoulos who had been invited to speak.
Berkeley’s central administrative offices did not immediately respond.