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

Innovative cities across America are racing to become the next hotspot for cryptocurrency and blockchain adoption. Miami was the first city to adopt its own share of CityCoins last year, allowing it to implement its own cryptocurrency called “MiamiCoin” to be used for civic engagement.

New York City has also made a name for itself as a crypto-friendly city by implementing educational initiatives and with Mayor Eric Adams receiving his salary in Bitcoin (BTC) in January this year.

Austin takes a strong stance

Recently, Austin – the capital of the state of Texas with the slogan “Keep Austin Weird” – has shown a strong interest in cryptocurrency and blockchain technology. While Texas’ desire to lead the way for crypto innovation was established about a year ago when Governor Greg Abbot tweeted Saying he is a “supporter of the crypto bill,” the City of Austin has taken additional steps to ensure cryptocurrency adoption for city services.

On March 9, 2022, Austin City Councilman Mackenzie Kelly put forward a resolution to instruct Austin’s city manager to investigate possible use cases of cryptocurrency that will benefit Austin and its residents. The resolution specifically asks the city manager to explore how the city could use Bitcoin and other cryptocurrencies for financial transactions.

Kelly told Cointelegraph that her resolution instructs the city manager to conduct a fact-finding mission to determine what the city needs to accept Bitcoin or other cryptocurrency payments for city services:

“This is more of a feasibility study. We don’t currently have enough information as councilors to know if we can accept crypto as payment for city services. We need to know more about this before we can decide. On top of that, there’s security info that we need to look at to see if this is even viable or if we can keep crypto on our books financially. We don’t know if we can bill it as an asset – that would stop us from accepting crypto as payment. There is also the financial stability of crypto as a whole, and if we can even accept it in that regard.”

Image from Austin City Council meeting on March 24, 2022. Source: Austintexas.gov

While questions remain, Kelly said Austin has always been a forward-thinking and innovative city, noting that many cryptocurrency investors currently live and work in Austin. Kelly added that Austin Mayor Steve Adler is co-sponsoring her resolution. Given this support, Kelly believes cryptocurrency payments will be a useful alternative to give individuals the flexibility to pay for certain city services. She explained:

“For example, if someone gets a speeding ticket and doesn’t have a bank account but does have crypto, he can use crypto as a means of payment. Or if they wanted to pay their taxes or electricity bills with Bitcoin or dedicate a park to their name with crypto. This is all part of the analysis to allow the City of Austin to accept crypto payments.”

This could certainly have a huge impact as recent data from Finder.com has shown that 8% of Texans already own Bitcoin and its adoption in the state could reach 14% by the end of the year. Austin, in particular, could benefit from crypto payments for city services, as Google data shows that Austin ranks number one in Texas when searching for the keywords “Bitcoin” and “crypto.”

All things considered, it should come as no surprise that Kelly’s resolution was passed at the Austin city council meeting on March 24. Now that the resolution has been passed, Kelly explained that the next step for approval will take place in mid-June when the Austin city manager can determine whether crypto can indeed be accepted as payment. This will be based on the city’s research related to financial stability, security, equity and inclusion and benefits or risks to consumers.

In addition to Kelly’s resolution, Adler’s resolution, focused on blockchain technology, was also passed during Austin’s March 24, 2022 working session. During the meeting, City Councilor Sabino Renteria explained that Austin began exploring its use four years ago. of blockchain to ensure that the city’s homeless population would be in control of their personal data at all times. “The concept was what if we use blockchain technology to give people ownership and access to all their data,” he noted. Renteria added that he is “excited at the prospect of what blockchain can do.”

While both resolutions are innovative, some Austin city council members expressed concerns during the meeting. Councilor Leslie Pool said her main concern regarding blockchain implementation is the “lack of central authority”. She added:

“It can be tamper-proof and tamper-proof, but that’s all it is. It is a digital ledger. So there may be some unique uses for this or for the city to promote its use, but right now, given the relatively recent access to data storage or other digital arenas, I’m very cautious about the city diving into it. adopt or use it. I would really like to hear from our finance staff or experts on these technologies before making any decisions to adopt these items.”

Regarding the cryptocurrency resolution put forth, Councilor Pool added:

“I continue to believe that crypto is too volatile, a form of currency, to risk taxpayers’ money or employee retirement. Crypto is not regulated. It’s not just unregulated. It is also unprotected. There is an element of gaming involved here. That really makes me restless. Crypto as a means of payment or investment is not in line with a municipality’s role in securing the community’s income.”

Austin perseveres despite worries

Concerns aside, Austin residents remain positive about cryptocurrency and blockchain innovation in the city. For example, Jesse Paterson, chair of the education committee at ATX DAO — a chain agnostic decentralized autonomous organization (DAO) in Austin — told Cointelegraph that the organization aims to serve as a local resource to help educated city councilors and residents on the implications of the recently passed resolutions:

“Some ATX DAO members were at City Hall to show our support for the resolutions, but we are still cautious as we are still in the early days of crypto. That’s why it takes time to understand space before diving into projects.”

Ryan Harvey, ATX DAO community manager and long-term resident of Austin, added that, based on the wording of both Councilman Kelly’s crypto resolution and Mayor Adler’s blockchain resolution, it’s clear that these are still fact-finding missions. However, he noted that this is a positive step in the right direction:

“New information is always good. But even beyond the fact-finding, both resolutions show that Austin is open to business and encourages innovation, which is fantastic.”

At the March 24 council meeting, Harvey took a few minutes to share his thoughts with councilors. He stated, “There are organizations here in town like ATX DAO — and I was excited to see DAOs mentioned in the resolution — that can be a reference point.”

ATX DAO Community Manager, Ryan Harvey, comments on the March 24 city council meeting. Source: Austintexas.gov

In addition to ATX DAO’s efforts, other Austinites are creating initiatives with crypto and Web3 elements to give back to the community. For example, City Magic is a project that aims to bring communities together in Austin through grants in the form of nonfungible tokens (NFTs).

City Magic founder Raffi Sapire told Cointelegraph that the project will award $1,000 in grants to people in the Austin community who want to create a friendly space or event for neighbors or for community involvement. “City Magic is for people with a civic spirit and for people who care about the community. It also helps build a bridge for people who may not have worked with tokens before. Grants are NFTs, and the cost of joining our committee is equivalent to one grant that benefits community involvement.”

Adler recently demonstrated his support for Sapire and other blockchain-focused Austin entrepreneurs and companies in a tweet that read, “Austin is excited to support the companies and innovations that will make the promises of Web3, cryptocurrency and blockchain technology a reality.”

Moreover, Austin may soon join the ranks of Miami and New York City by implementing its own CityCoin. A member of the CityCoin community spoke about how this could pan out in a presentation at ETH Austin, a two-day event that took place during South By Southwest. The community member shared that CityCoins’ main goal is to work with the City of Austin to help officials such as Mayor Adler and Councilman Kelly better understand how Austin’s proprietary cryptocurrency can be successful. “We need to define this and make sure we get it right before we do anything. Ideally, we would like to have an announcement about this during Consensus 2022, which will take place on June 9.”

CityCoins Community Member Presents at ETH Austin. Photo credit: Rachel Wolfson

When asked about the implementation of CityCoin in Austin, Kelly commented, “I am open to the idea, but my financial conclusion depends on my resolution and knowing that it is feasible for the City of Austin to accept crypto as a whole. ”

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