The city of Berkeley is set to become one of the first cities in the nation to incorporate blockchain technology in its municipal bond market, according to a Dec. 23 press release issued by the mayor’s office.
This announcement comes after a unanimous city council vote granted authorization for the city manager to work with a firm that will provide support to the city in developing a microbond financing program. The city of Berkeley has been working to develop the new blockchain market since 2019, according to the release.
To that end, the city has been in conversation with Blockchain at Berkeley, which has worked to support the city in the development of the project since 2019, according to Blockchain at Berkeley co-president Ratan Kaliani. Blockchain at Berkeley has experience with similar consulting projects and in educating people about blockchain, Kaliani added.
“At its core, blockchain technology is a decentralized data ledger,” Kaliani said. “It’s decentralized, so it doesn’t have any central point of failure like a bank or government.”
According to Kaliani, traditional municipal bonds are costly, hard to access and targeted toward wealthier individuals.
The press release states that the new microbond system allows municipal bonds to be purchased for $100 or less, as opposed to the $5,000 purchasing minimum on traditional municipal bonds. The city anticipates that blockchain will increase access to municipal bonds.
Mayor Jesse Arreguín said in the press release that incorporating blockchain into the city’s bond market will not only crowdsource funding for city projects but also provide residents with more investment opportunities.
City Councilmember Ben Bartlett, who is credited with bringing this idea to the city, said in the release that the transparency blockchain promotes contributes to Berkeley’s vision of equity and inclusion by creating more investment access for residents.
“I think this is one of the first real-world examples of how cities and governments are taking advantage of blockchain technology to really uplift their citizens,” Kaliani said.
Kaliani said incorporating blockchain into the city’s municipal bond market bridges the divide between those fluent in technology and those who are less fluent.
Once blockchain is improved, Kaliani said it is inevitable that the technology will become more integrated into daily lives because of its ability to grant independence and access to financial opportunities to individuals.
Kaliani urged UC Berkeley students and community members to care about development in technology that has an impact on the community and improves people’s lives.
“It is really important to understand not just what new tech can do to improve lives in a theoretical way, but actually take that technology, put it into a system that already exists and make it better,” Kaliani said.