Berkeley, a US city located in eastern California, is thinking about an initial coin offering (ICO) as a means of raising money for social projects, specifically affordable housing. Speaking to Business Insider, Berkeley City Council member Ben Bartlett revealed the plan sprang from a desire to reduce financial dependence on the federal government. President Donald Trump has threatened to cut federal funds for sanctuary cities, making specific references to Berkeley in his tweets.
The city is now considering the creation of a token that would be backed by municipal bonds. If the plan goes through, Berkeley will be the first US city to conduct an ICO. Those who participate could use the tokens to pay at local stores and restaurants or to rent apartments.
The ICO would help officials raise funds for social projects such as affordable housing and support services for homeless people. According to Berkeley’s Health, Housing and Community Services Department, rent prices have surged almost 90% since 2011, which has in turn triggered a rise in homelessness. At least 1,000 individuals currently have no place to live in, with the number of homeless people growing by 43% since 2009.
Bartlett has formed a special committee to devise a strategy for the ICO. Members include Berkeley Mayor Jesse Arreguín, the UC Berkeley Blockchain Lab, and fintech startup Neighborly. Kiran Jain, Neighborly co-founder and COO, said the ICO would launch by May if the plan gets approved.
Bartlett described the project as a way for the city to grow resilient during Trump’s mandate.
“Berkeley is the center of the resistance, and for the resistance to work, it must have a coin,” he told Business Insider.
The problem for Berkeley is that Trump’s tax bill, which became law at the end of December, came with significant changes in the corporate tax code, with some provisions discouraging incentives for private contractors to build affordable housing.
Berkeley’s status as a sanctuary city is another problem. The term means it is a safe haven for refugees and immigrants, and Trump might cut funding for such cities as he openly fights immigration. The city’s elected officials tend to snub cooperation with Trump’s federal immigration officers, which leads to high political and social tensions.
As Bartlett put it, the whole plan is “actually enabling us to fulfill our duty as a government. Our duty is to provide for our people. It's a violation of that duty to allow people to sleep in the streets.”
Berkeley may become the first city in the US to issue its own token, but similar plans have already been put to trial in other parts of the world. In November, the UK city of Hull, in East Yorkshire, was testing its own cryptocurrency called HullCoin.