ICO – Initial Community Offering! Berkeley Sells Tokenized Bonds to Fund Community Projects
You’ve heard of the Initial Coin Offering, but how about an Initial Community Offering? Well, that’s exactly what one US city are planning, in an innovative move to fund community projects such as affordable housing.
The key to the idea is the issuance of municipal bonds – a type of government security. This is similar to digital currencies. And Berkeley have teamed up with Neighborly – a nationwide investment site for municipal contracts – to focus their efforts on creating affordable housing in their own neighbourhoods. Investors will have the chance to have a say in where money should be invested, and can then earn interest on their investments through the bond return. Councilman Ben Bartlett told Forbes:
Twenty years ago we had a local currency called ‘Berkeley Bucks’ – this is similar to that model, but this time we are applying blockchain technology as well. These microbonds are issued via a blockchain that the UC Berkeley Blockchain Lab is designing. Once bonds are issued, the community will decide on projects they want to fund. And because this is built on the blockchain, this model is faster, more cost-effective and eliminates all middlemen.
And other communities across the states will be keeping a close eye on proceedings as they look to leverage blockchain concepts to improve their own infrastructures. It is no surprise that Berkeley have looked to San-Francisco for partnership in Neighborly, as it is the adopted capital of blockchain within the US. But success will surely see other major cities like New York and LA look for their own partnerships.