Berkeley is also considering, since February, to have a municipal token as a way of assisting funding for its projects. It says the project will proceed if the political process allows it.
The city of Berkeley, California will be moving forward with a pilot program to sell municipal bonds on blockchain. The city council unanimously voted to ask the city manager to consider the program proposal.
The initiative will see the city raise funds for community projects on the blockchain. It will be an additional funding method for the city. The program was started by vice Mayor Ben Barlett.
It will introduce “micro-bonds” and allow issuance of municipal bonds in denominations of $10 to $25. This is compared to the typical minimum denomination of $5,000. Thus, it will see many more people affording the $10 than $5,000 for a bond. This would make investing in city projects much more viable option for average citizens, said Barlett.
The blockchain will provide a legal method of recording the micro bonds after issuing. However, using blockchain will help to “meant to get around Wall Street” according to Barlett.
Barlett also said they could issue a tokenized currency to support funding for municipal projects if the political process allows it. The city started considering a municipal token in February after US president Donald Trump tweeted that the local university would lose its federal funding.
The city hopes to use municipal token to avoid budget shortfalls resulting from resistance by the Trump administration.
Councilwoman Susan Wengraf is however skeptical on the move saying it is very unstable. She says other communities that have issued bonds successfully issued in dollars and cash not cryptocurrencies.