Initial Coin Offering Planned By The City of Berkeleybr>
The city of Berkeley is considering an initial coin offering (ICO) to raise funding for community projects.
Berkeley, one of the epicenters of liberal California, is contemplating selling tokens backed by municipal bonds, a type of security issued by the local government. Buyers might spend these tokens at shops and restaurants or even pay rent on apartment rentals that participate in Berkeley’s cryptocurrency ecosystem.
Berkeley Mayor Jesse Arreguín and City Council Member Ben Barlett have formed a committee with financial technology platform Neighborly to build a strategy for the ICO. The FinTech company’s co-founder Kiran Jain suggested that the city could launch what it’s calling an “initial community offering” as soon as mid-May.
“Unlike most of the ICOs which deliver coins for a future value or service, these coins will represent a real security issued for a specific purpose,” said Jain.
The goal of the project is to raise funds to help alleviate the shortage of affordable housing in the city, which leads to increased homelessness. According to a survey by Alameda County, the regional homeless population grew from roughly 4,040 in 2015 to 5,629 by 2017. This represents a dramatic surge compared to survey data reaching back to 2009.
Bartlett said the idea for the ICO was hatched after President Donald Trump signed the Republican tax bill into law at the end of December. The new legislation makes it almost impossible for contractors to build affordable housing.
“We have a jobs explosion and a super tight housing crunch,” Bartlett said. “You’re looking at a disaster. We thought we’d pull together the experts and find a way to finance [affordable housing] ourselves.”
Bartlett said he expects the city’s affordable housing budget to shrink under the Trump administration, and that an ICO offers a way for the local government to adapt. He added that the success of the ICO could also lead the way for other sanctuary cities to create financial independence from the federal government.
“It’s actually enabling us to fulfill our duty as a government,” said Bartlett. “Our duty is to provide for our people. It’s a violation of that duty to allow people to sleep in the streets.”