Finance

A city in California is considering launching its own cryptocurrency

By Oliver Smith 8 February 2018
Image: Michael B. Thomas/AFP/Getty Images.
Summary

Berkeley-coin is peak 2018.

Local government funding is a tough gig.

In Britain, dozens of local councils are running up huge budget deficits, while some cities are taking Silicon Valley handouts to try and reduce poverty.

Now the US city of Berkeley is considering launching its own cryptocurrency, as a way for residents to invest in their local community and raise funding for affordable housing.

It’s not dissimilar from what Estonia was mulling last year, replacing corporate bonds with something a little more 21st century, and giving anyone a way of investing in and benefitting from the success of the country.

Read more: Estonia’s plan to replace boring bonds with crazy cryptocurrencies

Berkeley-coins

But Berkeley’s proposals are slightly different from Estonia’s.

The council says it sees cryptocurrencies as a way of reducing its dependence on local business taxes – which have been slashed by Trump – and also distancing itself from the funding of a President who has been openly hostile to the city.

“Berkeley is the center of the resistance, and for the resistance to work, it must have a coin,” Berkeley City Council Member Ben Bartlett told Business Insider.

Future funding

“A country launching its own ICO may sound absurd,” Wong Joon Ian, who covers technology, cryptocurrencies and blockchains at Quartz and previously at Coindesk, told The Memo when Estonia revealed its idea to create an ‘Estcoin’.

“But it’s just the logical progression of a future with a spectrum of different kinds of money.”

In fact, Berkeley’s proposal is even more like a currency than Estonia’s, as Bartlett says it could be spent in local shops.

That said, the plummeting price of Bitcoin and other cryptocurrencies has cast a long shadow over the entire cryptocurrency industry, leading many to wonder if there’s still demand for new cryptocurrencies.

If it works, Berkeley could chart a solution for the tough environment of local government funding and paying for our crucial services. If not, they’ll likely have to turn back to Trump cap in hand.