From :: https://cbw.cryptoassetrating.com/Article/1033/crypto-business-world-us-city-plans-to-sell-tokenized-bonds-in-‘initial-community-offering’
US City Plans to Sell Tokenized Bonds in ‘Initial Community Offering’
By Rating Crypto Asset: Wed, 24 Jul 2019
Confronted
with substantial federal funding reductions, Berkeley, California, is
turning to crypto tokens as away to fund services like affordable
housing.
Mayor Jesse Arreguin and councilman Ben Bartlett have teamed up with San-Francisco-based investment startup Neighborly to
advance an initiative that would divide municipal bonds into
micro-bonds and then sell them as tokens in what they call an “initial
community offering.”
“Essentially,
we would like to explore some new ways of financing because we have
terrific needs, and we’re concerned about our ability to fulfill our
moral and legal obligations for our residents here,” Bartlett said,
according to CityLab, adding:
“The resistance requires a coin.”
Bartlett
and Arreguin said that breaking up the bonds would allow people to
invest in projects of their choosing in low denominations. Meanwhile,
transferring the buying and selling process to a blockchain would mean
reduced transaction costs and transparent city finances.
Because
the tokens would be backed by the underlying bond, Bartlett says the
initial community offering would be less risky than a typical ICO.
Likewise, Neighborly CEO Jase Wilson said, “Berkeley is an extremely strong and fiscally disciplined borrower.”
The
project’s backers hope that by selling the micro-bond tokens, they will
eventually be able to fund affordable housing projects, but they plan
to start with smaller ventures, such as purchasing an ambulance for a
fire station. They hope to hold their ICO in May.
“This
municipal coin, this token, whatever you want to call it, it’s meant
to…hopefully produce a really demonstrable new paradigm of shared
prosperity,” Bartlett said.
Source: Coindesk.com
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