Faced with reductions in Federal funding, Berkeley, located in California, decided to use a crypto token for financing such services as, for example, the construction of affordable housing.
Mayor Jesse Arreguin and Advisor Ben Bartlett agreed to cooperate with the investment startup from San Francisco Neighborly, to work on an initiative in which municipal bonds will be divided into micro-bonds, and then sold in the form of tokens at the event, which they call “the original proposal of the community” (English – initial community offering or ICO). Bartlett, commented on the initiative:
In fact, we would like to explore some new ways of funding, because we have great needs, but, at the same time, we are concerned about our ability to justify the confidence of the residents of our city.
Bartlett and Arreguin stated that the change in the structure of the bonds allow people to invest in projects of their choice. Meanwhile, the use of blockchain tokens for sale will mean a reduction in transaction costs and ensure the transparency of city financing.
Bartlett believes that the company will be less risky than the typical ICO. CEO Neighborly Jace Wilson also believes that:
Berkeley is an extremely strong and disciplined borrower.
Supporters of the project hope that, after the sale of tokens, they will be able to obtain financing for projects for affordable housing, but they plan to start with small projects such as buying ambulances for the fire station. The ICO is planned to be held in may.