Is Austin the next US crypto hub? Officials approve blockchain resolutions

Is Austin the next US crypto hub? Officials approve blockchain resolutions

America’s most innovative cities are vying to be the next big spot for blockchain and cryptocurrency adoption. Miami became the first to adopt its own CityCoins section last year, allowing it implement its own cryptocurrency “MiamiCoin” for civic engagement.

New York City is also known for being a crypto-friendly place. This has been achieved by its implementation of educational initiatives. Mayor Eric Adams received his salary in Bitcoin (BTC), in January 2018.

Wetin takes a firm stance

Recently, Austin, Texas’ state capital and a slogan-bearing city called “Keep Austin Weird,” has shown a keen interest in blockchain technology and cryptocurrency. Texas’ determination to be a leader in crypto innovation was evident about a year ago, when Governor Greg Abbot posted that he supports “crypto law proposals.” However, Austin has taken additional steps to ensure cryptocurrency is accepted for city services.

I am a supporter of crypto law proposals. It is becoming more popular as a transaction tool and is starting to be mainstream as an investment. (Fidelity, etc. Trying to get Bitcoin ETF. Texas should be the leader in this endeavor, just like it did with a gold deposit. https://t.co/1z25mtgnmu
— Greg Abbott (@GregAbbott_TX) March 29, 2021

Mackenzie Kelly, Austin’s city councilor, proposed a resolution directing the Austin manager to investigate possible uses of cryptocurrency in Austin for its residents. The resolution asks that the Austin city manager examine ways the city might adopt Bitcoin and other cryptocurrency for financial transactions.

Kelly shared with Cointelegraph her resolution to direct the city manager, to conduct a fact finding study to determine the requirements for accepting Bitcoin or other cryptocurrency payments to city services.

“This is a feasibility study. As council members, we don’t currently have enough information to determine if crypto can be used as payment for services. Before we can make a decision, we need to learn more. To determine if it is feasible or possible to keep crypto in our financial books, we must look into security information. It is not clear if it can be billed as an asset. This would prohibit us from accepting crypto payments. We also need to consider the financial stability of crypto, and whether we are able to accept it as such.

Image taken at the Austin city council meeting of March 24, 2022. Source: Austintexas.gov

Kelly said that Austin is a forward-thinking, innovative city. She also mentioned that many cryptocurrency investors live and work here. Kelly also mentioned that Austin Mayor Steve Adler was a cosponsor of the resolution. Kelly believes that cryptocurrency payments could be a viable alternative to the traditional method of payment for certain services in cities. She went on:

If someone is given a speeding ticket and does not have a bank account, but has cryptocurrency, they can use crypto to pay. If they wanted to pay their electric bills or taxes using Bitcoin, or dedicate a park in the name of their choice using crypto. All of this is part of the analysis to allow Austin to accept cryptocurrency payments.

This could have a significant impact on the state’s adoption of Bitcoin. Finder.com data shows that 8% of Texasans own Bitcoin. Austin could be a beneficiary of crypto payments for city services. Google data shows Austin is the most searched city for “crypto” and “bitcoin”.

It shouldn’t surprise, then, that Kelly’s resolution passed during Austin’s March 24th city council meeting. Kelly explained that now that the resolution is passed, the next step to approval will be in mid-June when Austin’s city manager will determine whether crypto can be accepted as payment. Based on the city’s research about financial stability, security and equity, as well as consumer benefits and risks, this approval will take place.

Kelly’s resolution was passed, and Adler’s resolution on blockchain technology was also adopted during Austin’s March 24, 20,22 working session. Sabino Renteria, a city council member, explained that Austin began exploring blockchain technology four years ago in order to make sure that the city’s homeless population had complete control over their records. He said, “The idea was what if blockchain technology could be used to allow people ownership and access all of their records.” Renteria said that he was “excited by the potential of blockchain.”

While both resolutions were innovative, some Austin council members voiced concerns at the meeting. Leslie Pool, a councilmember, stated that blockchain implementation has her biggest concern because it lacks a central authority.

It may be tamper-proof and tamper resistant but that’s all it is. It is a digital ledger. It may have some unique uses or the city could promote its use. However, at this point in time, due to its relatively recent entry into data storage and other digital arenas, I am very cautious about the city adopting it or using it. Before adopting these items, I would like to hear from the experts in these technologies or our financial staff.

Pool, a council member, added that the resolution on cryptocurrency was put forward:

“I believe that crypto is too volatile. It’s a currency to be risky for tax payer dollars and employee retirements. Cryptocurrency is not regulated. It is not only unregulated. It is also not protected. This has a gaming element to it. This makes me feel very uneasy. The use of crypto as a payment method or investment is not compatible with the municipality’s role in protecting the community’s revenue.
ustin pushes forward, despite concerns

Despite concerns, Austin residents are positive about cryptocurrency and blockchain innovation in the city. Jesse Paterson, the chair of ATX DAO’s education committee, said that the organization is a local resource for residents and city council members on the implications of recently passed resolutions.

“Some ATX DAO members attended city hall to support the resolutions. However, we still cautioned people that we are still very early in crypto. It takes time to learn the space before you dive into projects. @realitycrafter and @crystalGravy2 were present at today’s Austin City Council Meeting to provide public comments in support of resolutions 55+57. ATX DAO will gladly support any city projects and investigations into the web3 space. pic.twitter.com/8zzIEQVyNz
— ATX DAO (@ATXDAO), March 24, 2022

Ryan Harvey, ATX DAO Community Manager and a long-time Austin resident, said that it was clear from the language of both Mayor Adler’s and Council Member Kelly’s crypto resolutions that these are still fact finding missions. He noted that this was a positive step in a good direction.

“New information is always good.” Both resolutions, in addition to fact-finding and innovation, show Austin is open for business.

Harvey spoke briefly to city council members during the March 24 meeting. Harvey stated that “There are organizations in town like ATX DAO — I was excited to read DAOs mentioned within the resolution — that could be a reference point.”

Ryan Harvey, ATX DAO community manger, comments at the March 24, city council meeting. Source: Austintexas.gov

Other Austinites are also creating initiatives using Web3 and crypto elements to give back. City Magic, for example, is a project that aims to unite Austin communities through grants in form of nonfungible tokens.

Raffi Sapire, founder of City Magic, told Cointelegraph that the grant program awards $1,000 to Austin residents who create an event or space for neighbors or engage in civic activities. City Magic is for civic-minded people who care about the community. It helps to build bridges for people who have never used tokens before. Grants are not financial aid. The cost to join our committee is the same as one grant that will be used to benefit civic engagement.

Adler expressed his support for Sapire, as well as other blockchain-focused Austin businesses and entrepreneurs in a tweet that read: “Austin is thrilled to support the innovations and businesses that will turn the promises made by Web3, cryptocurrency and blockchain technology into reality.”

Austin could soon follow the New York City and Miami footsteps by implementing its CityCoin. In a presentation at ETH Austin (a two-day event held during South By Southwest), a CityCoin member discussed how this might play out. A community member explained that CityCoins’ primary goal is to collaborate with Austin officials such as Mayor Adler or council member Kelly to better understand Austin’s cryptocurrency potential. “We must define this and ensure that we do it correctly before we move on to anything. We would like to announce this at Consensus 2022 on June 9, as it is scheduled to take place.

CityCoins community member presents at ETH Austin Photo credit: Rachel Wolfson

Kelly answered a question about the implementation of CityCoin in Austin. She said, “I’m open for the idea, but I have to make a financial decision. That depends on my resolution passing, and knowing that Austin can accept crypto as a whole.”

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