Last night, Ben Bartlett, Berkeley Vice Mayor, gave an inspiring talk at Crypto underground on how blockchain can help shape the future of cities by spurring economic growth at the local level and creating an entirely new asset class of ownership. Ben is currently working on a project to create a virtual currency for Berkeley, fitting for a city known for its creativity and rebellious nature.
Ben wants to use blockchain based microbonds to capture all the billions of dollars that currently go to middlemen and not back into communities. Ben explains that:
“Currently, governmental entities sell their bonds to banks who then resell the bonds to numerous intermediaries before reaching an investor. Each intermediary charges fees and markups. The UC Berkeley Haas Institute estimates that bond issuers lose approximately $4 billion annually as a result of this process. Furthermore, the costs of issuing and administering bonds make it impossible for small investors and regular people to purchase them. As a result, the people are losing out on a major form of wealth building.”
Once bonds are on the blockchain they can be tokenized and issued to ordinary individuals in small increments, making fractional ownership of a physical asset affordable. Ben believes this is going to be massively important because in 2045, people aren’t going to own anything. With the decline in real estate purchases, car ownership, job outsourcing and automation, he thinks we’re well on the path to zero asset ownership.
Furthermore, when people purchase tokenized microbonds, earned interest payments can help create smart local currencies that drive public benefit and community participation in local markets by encouraging spending and strengthening the economy. Use Fairfax as an example, which had their own local currency called FairBuck . Although the currency was not on the blockchain, it serves as a good use case to what’s possible when it comes to funding local community projects.
Pretty cool idea! Looking forward to see how this project progresses and hope that other cities and states will follow suit. You can read Ben’s whitepaper titled “The Smart Path: Solving for Zero Assets” here.