We have learned that ICO stands for Initial Coin Offering, right? While that’s still the case, it could also mean something else – Initial Community Offering.
That’s what the city of Berkeley in California wants to launch and raise funds for important projects like affordable housing projects. Before that, they want to test the idea with smaller ventures, such as purchasing an ambulance for a fire station.
How it’s done?
To make this Initial Community Offering possible, Berkeley has teamed-up with San Francisco-based investment startup Neighborly to divide regular municipal bonds into micro-bonds and then sell them as tokens. This way people would be able to invest in projects of their choosing in low denominations, with the underlying blockchain-based technology ensuring for reduced transaction costs and transparent city finances.
“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,” said Berkeley councilman Ben Bartlett.
Because the tokens would be backed by the underlying bond, Bartlett said this will be less risky than a typical ICO (Initial Coin Offering). And that sentiment is shared by Neighborly CEO Jase Wilson, who praised Berkeley as an “extremely strong and fiscally disciplined borrower.”
Bartlett went on to add that he hopes this token could produce “a really demonstrable new paradigm of shared prosperity.”
The project’s backers hope to hold their ICO in May.
A village in Japan also wants to launch an ICO
Berkeley is not the only municipality in the world looking to raise funds with an ICO (of sorts). The village of Nishiawakura in Okayama Prefecture in Japan aims to do something similar, as we have reported before.
From what we have learned at the time of reporting on that story, Nishiawakura was planning to use the money raised for financing projects to upgrade vital infrastructure in the village. We are, however, not sure how that project went. And even whether it’s still a “thing” or not. We’ll make sure to update that piece once we get new information. Stay tuned in the meantime…