Berkeley Reaches for Blockchain in Search of City Problem Solutions
The US city is working on blockchain-based system to eliminate homeless issue
Berkeley’s local administration is working on launching an “initial community offering” that would assist the city's efforts in resolving its homelessness and housing problems. The Blockchain-based public campaign will be the first one among US cities to sell digital tokens in support of a crowdfunding endeavor, according to an announcement.
The city administration creates innovation in hopes of success
The first step is the founding of Berkeley Blockchain Initiative, which will be responsible for the municipality's token offerings. Like the initial coin offering (ICO), the initial community offering will be practically a cryptocurrency fundraising campaign.
The difference is that the tokens sold won't stand for future value, but for real security for a specific purpose, explains Kiran Jain, chief operating officer and general counsel of Neighborly, technological corporation that works for the municipality's modernizations. The project includes also the UC Berkeley Sutardja Center’s Blockchain Lab as a partner.
The City Council have been studying the opportunities, provided by Blockchain technology for about a year now. The initial push came when the city faced the risk of decreased federal funding from the Trump administration and with it – of insufficient finance for key projects.
The project is still about to be approved by the City Council and to receive other needed official approvals. Jain believes that its official start will be probably in mid-May.
According to him, the initial community offering is much like a municipal bond. Officially, the process is referred to as “tokenized municipal offering” and is synchronized with all legal regulations, including those for low-cost tax-exempt debt.
The project's aim is to use the funds raised to support initiatives for affordable housing, according to its movers.
In fact, the funding can be used in any way the community wants, City Council member Ben Bartlett explains. The investors will actually buy tokens, backed by municipal bonds and the collected amount can be used in favor of housing and homelessness services.
Berkeley is facing a housing crisis and this is not its first attempt to resolve it. In the past there were projects, researching the use of tiny buildings for ensuring homes.
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