Cryptocurrencies have proven to be an interesting way of transfering value. In a lot of cases, people seemingly take a liking to Bitcoin and a few altcoins. In the city of Berkeley, however, a brand-new cryptocurrency will be introduced and issued. This new currency will mainly be used to fund affordable housing in the area.
Berkeley’s ICO is an intriguing Creature
It is quite interesting to see how different people and regions respond to the “challenge” of cryptocurrencies. More specifically, this new form of money has certainly introduced a lot of interesting changes, even though not everyone sees the value in it right now. That situation is slowly changing in favor of this nascent industry, by the look of things. While we may not see mainstream cryptocurrency adoption anytime soon, the concept powering this new form of money is being explored behind the scenes.
Most recently, the city of Berkeley, California has been looking into creating its own cryptocurrency. While interesting, this should not come as much of a surprise. Individual US states have different opinions and regulations associated with cryptocurrency as of right now. California appears to be rather open-minded when it comes to this new form of money, although things are always subject to change.
The main reason why the city of Berkeley is taking this approach is that it wants to solve a very real problem. Housing in the city is not easy to come by, mainly because of the mounting prices. To counter this problem, the city will organize an ICO – Initial Community Offering – to fund affordable housing to support the homeless population in the city. It is evident this is a rather different business model from what most people first expect.
Berkeley City Council member Ben Bartlett explains it as follows:
This is not your typical ICO, but rather an initial community offering. We decide to explore new forms of finance in response to the cuts from DC and corporate tax cuts that took away our ability to fund affordable housing. There are more than one-thousand homeless people living in Berkeley, which is projected to increase by a factor of five in the coming years. Many cities, just like Berkeley, are under a funding assault – we have to think outside of the box in order to solve this problem. We did this a decade ago with PACE financing and now it’s time to do it again.
With nearly 1,000 homeless people in the city at the end of last year, it has become a matter of great importance to turn this situation around. Doing so is not all that easy, though, especially considering the recent changes to the US tax code for businesses. Many people fear this change will have a negative impact on the contractors building affordable housing across the nation. This is why the city of Berkeley wants to remain ahead of this problem and take a very different approach.
It is important to note Berkeley’s cryptocurrency is very different from traditional ICOs. Instead, it’s issuing bonds which are backed by municipal bonds, which can be put on the same level as a government-issued security. By tokenizing these bonds, the Berkeley City Council aims to appease residents who want to make their city a better place for everyone. If this effort proves successful, we may see similar efforts take place across the United States moving forward.