In a unanimous vote Tuesday, the city council of Berkeley, Calif., took a step toward approving the issuance of a blockchain-based "microbond."
Ben Bartlett, the vice mayor and council member who spearheaded the initiative, told CoinDesk by phone on Thursday: "It's happening. We passed it."
But the actual decision taken by the vote is a bit more convoluted.
According to Berkeley's city clerk, the council decided to "refer to the 2018 prioritization process to direct the City Manager to produce a report outlining steps required if the City were to implement a Pilot Project for the Community Microbond Initiative within 90 days."
Another member of the city council, Susan Wengraf, cautioned that "this action does not imply approval at this time."
But according to a council member who preferred not to be named, the proposal is moving at a rapid clip through the "byzantine labyrinth" of city government.
"This is a really big win," the member said, explaining that the strong support signaled by five of the nine council members Tuesday means that, rather than taking a decade, the project is likely to progress rapidly.
Bartlett says that he faced considerable opposition to his blockchain-based municipal bond going into the meeting, with only two members in favor. But his pitch for low-denomination bonds, housed on a distributed ledger, found fertile ground.
Currently, he says, costs imposed by financial intermediaries force municipal bond issues to be large and drive the minimum a person can invest up to $5,000 or even $100,000. "No one can buy them," says Bartlett, adding, "they're not targeted to specific needs for neighborhoods and communities."
He believes that blockchain technology could allow for bonds selling at $5, $10 or $25 each, perhaps with tokenized interest payments, while simultaneously increasing transparency:"Blockchain allows us to really disintermediate that process and mak...