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Berkeley’s plan to make its own cryptocurrency raises eyebrows

February 24, 2018

By Sophie Haigney : sfchronicle – excerpt

Facing a homelessness crisis and funding gaps from recent tax cuts, the city of Berkeley is considering something revolutionary: making its own bitcoin-like cryptocurrency.

“Acts of resistance require creating resources,” said Councilman Ben Bartlett, one of the people behind the plan. He’s working with Mayor Jesse Arreguín, and teaming up with the startup Neighborly and UC Berkeley’s Blockchain Lab on proposals to turn municipal bonds into digital currency, with the goal of raising additional funds for specific projects…

Berkeley has no plan to buy bitcoin, ether or other similar currencies with city funds. Instead, the idea is to break up municipal bonds, allowing people to buy them in smaller quantities as digital tokens, similar to how other cryptocurrencies are traded. The currency will use blockchain technology, as most cryptocurrencies do, that creates a decentralized ledger of transactions designed to increase people’s trust in cyber money. But the micro-bonds recorded on the blockchain will be tied to an asset — the underlying bond. Bartlett argues that this makes it less risky than other cryptocurrencies, which have seen wide price swings in the past year…

A spokesman for the SEC declined to comment.

Marc Lifsher, a spokesman for the State Treasurer’s Office, said the office has no position and views it as a local issue…

The city and its partners are planning what backers like to call “an initial community offering” for May.

Bartlett said that either the City Council would have to approve the plan, or its backers could pursue it with a private company without the council’s OK.

They want to move quickly, he said: The technology promises “direct community engagement, and the need is more pressing than ever.”… (more)

Interesting concept to open the market to smaller investors.

 

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