As one of the major elements of the well-known cryptocurrency, Blockchain, the technology behind Bitcoin has really evolved tremendously. It is starting to be integrated into almost everything — from the banking sector to the industry of healthcare.
Now, the technological prowess of blockchain will be tested in the complicated domains of real estate and public sector.
This year, the U.S. housing sector saw a slight hiccup in their real estate plans as its budget was reduced. The housing sector dilemma is currently impacting Berkeley, a city in Northern California on the east side of San Francisco Bay. It’s home to the University of California, Berkeley, birthplace of the 1960’s Free Speech Movement. However, instead of backing down, its city officials have decided to stand tall and help the society move forward.
Ben Bartlett, a city council member in Berkeley, has come up with a bold idea of integrating the blockchain technology into their housing sector dilemma. He and the Mayor of Berkeley, Jesse Arreguin wanted their city to have its very own cryptocurrency for buying municipal bonds.
According to Business Insider, in order to support the city’s planned cryptocurrency, Bartlett and Arreguin have initiated to launch an ICO. The ICO is expected to raise funds by means of selling digital coins that will be supported by the government municipal bonds.
And Instead of calling it ‘initial coin offering’, they made it their own with a new term, ‘Initial Community Offering’.
The two city officials are also supported by Neighborly, a financial technology platform that lets municipal finance professionals create investments in civic-natured missions, and the UC Berkeley Blockchain Lab.
According to Bartlett, “This is not your typical ICO, but rather an initial community offering. We decide to explore new forms of finance in response to the cuts from DC and corporate tax cuts that took away our ability to fund affordable housing. There are more than one-thousand homeless people living in Berkeley, which is projected to increase by a factor of five in the coming years. Many cities, just like Berkeley, are under a funding assault – we have to think outside of the box in order to solve this problem. We did this a decade ago with PACE financing and now it’s time to do it again.”
If deemed successful, Berkeley will come down in history as the first United States city to utilize cryptocurrency for political purposes. The authorities plan to launch the ICO and cryptocurrency in May 2018.
The funding and budget for the U.S. Department of Housing and Urban Development received a massive cut from the current government and in a city like Berkeley, there is now a threatening municipal bond problem caused by the housing sector dilemma.
Bartlett mentioned that there is a discrepancy when it comes to distributing municipal bonds because of the intermediaries who constantly add costs or sometimes delay the process. He believes that using a blockchain technology can somewhat remove the complications they face.
Barlett said, “Essentially, we would like to explore some new ways of financing because we have terrific needs. And we are concerned about our ability to fulfill our moral and legal obligations for our residents here.”
Municipal bonds are important for the growth of a society. Without its presence, a specific city would not be able to fund the development of different infrastructure facilities such as new schools, hospitals, an update of sewers, improvement of roads, and the creation of more housing projects.
Berkeley Not The First Place To Embrace Blockchain Technology
Venezuela is considered as an eminent country on the northern coast of South America because it recently presented its first state-backed cryptocurrency, Petro. Petromoneda or more commonly known as Petro was introduced to the public in February of this year and caters to mineral reserves and oil.
It was reported that Petro has produced a substantial amount of $735 million in its first day of sale. Nicolas Maduro, the President of Venezuela, said: “Today, a cryptocurrency is being born that can take on Superman.”
Aside from Venezuela, Estonia, a country in Europe, is also venturing into the cryptocurrency craze. Estonia still plans to create their own cryptocurrency, despite the doubts from the European Central Bank, one of the most powerful organizations in Europe.
Blockchain continues to create a bold impact on businesses and corporations around the globe. Now, the technological phenomenon is on its way to positively disrupt public sector issues.