Municipal Crypto Spreading Around the World, From California to Dubai
States, provinces and municipalities could use cryptocurrencies to fund projects and programs. Municipal cryptocurrencies — that is, cryptocurrencies launched by cities — could offer citizens a new way to invest in a certain location and even buy goods while helping governments to fund projects. Campbell Harvey from Duke University told Cointelegraph that municipal cryptocurrencies could provide a mechanism to fund certain projects. According to Harvey:
I think of it as, say, we need to build a new soccer field, given that we now have more boys and girls teams and the old field just can't handle it. So, we need to build a new soccer complex. Maybe it's got six fields. Could we issue like a crypto bond or currency where average people could actually buy into that?
The minimum bond investment is $1,000, although they are usually sold in batches of $5,000. People who want to invest less simply cannot do it. Cryptocurrencies and tokens could be used for assets under $5 million and enable investments under $5,000. Harvey sees the main mechanism for municipal cryptocurrency as the securitization of assets, such as the aforementioned soccer complex or, say, for a health clinic. Harvey told Cointelegraph:
Things that you can engage the community to actually contribute to things they get something for. So, they've got that kind of token, and potentially the token can be traded. You get some token for the soccer field, a soccer stadium or just some token, but it's also the case that you can say use that token to pay for 10% of your meal at the restaurant. This is something we've not had before.
If a municipality needs a new sports field, naturally it is going to cost money, which usually comes from taxes. They got the land, but it's going to cost some money for maintenance and stuff like that, Harvey said. So, you basically tokenize that and essentially sell the tokens to the community so you get the money. Harvey believes its easy for a municipality to launch such a token and that the issued token by the municipality could be useful. In the end, the community benefits from a multiplier effect, whereby, indirectly, several businesses may be linked through promotional and discount schemes connected through a municipal token.
Cointelegraph took a look at some of the municipal cryptocurrencies out there and their various stages of ideation and development from all around the world.
Berkeleys initial community offering
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The city of Berkeley, California, proposed in 2017 an initial community offering to raise money to fund affordable housing, rebuild transit systems and support social services. The in ...Read full story on Cointelegraph