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

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

Jessyca Feest March 27, 2022 Crypto Leave a comment 128 Views

Innovative cities across America are racing to become the next hot spot for cryptocurrency and blockchain adoption. Miami was the first city to adopt its own part 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 paycheck in Bitcoin (BTC) in January this year. 

Austin takes a strong stance 

Most recently, Austin — the state capital of Texas that goes by the slogan “Keep Austin Weird” — has taken 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 that he is a “crypto law proposal supporter,” the city of Austin has taken additional measures to ensure the acceptance of cryptocurrency for city services.

On March 9, 2022, Austin city council member Mackenzie Kelly put forth a resolution to direct the Austin city manager to explore possible use cases of cryptocurrency to benefit Austin and its residents. The resolution specifically asks for the city manager to examine how the city could adopt Bitcoin and other cryptocurrencies for financial transactions.

Kelly told Cointelegraph that her resolution directs the city manager to conduct a fact-finding study to determine what would be required for the city to accept Bitcoin or other cryptocurrency payments for city services:

“This is more of a feasibility study. We currently don’t have enough information as council members to know if we can accept crypto as payment for city services. We need to know more about this before we can decide. In doing so, there is security information 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 prevent us from being able to accept crypto as payment. There’s 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

Although questions remain, Kelly mentioned that 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 a co-sponsor of her resolution. Given this support, Kelly believes cryptocurrency payments will serve as a useful alternative to allow individuals the flexibility of paying for certain city services. She elaborated:

“If someone gets a speeding ticket, for example, and doesn’t have a bank account but has cryptocurrency, they could use crypto as payment. Or, if they wanted to pay their taxes or electric bills using Bitcoin or dedicate a park in their name using crypto. This is all part of the analysis for allowing the city of Austin to accept crypto payments.”

This could certainly make a huge impact, as recent data from Finder.com found that 8% of Texans already own Bitcoin and that adoption in the state could hit 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 at the number one city in Texas that searches for the keywords “Bitcoin” and “crypto.”

All things considered, it shouldn’t come as a surprise that Kelly’s resolution was approved during Austin’s city council meeting that took place on March 24. Now that the resolution has passed, Kelly explained that the next step for approval will occur in mid-June when the Austin city manager can determine if crypto can indeed be accepted as payment. This will be based on the city’s research regarding financial stability, security, equity and inclusion and consumer benefits or risks.

In addition to Kelly’s resolution, Adler’s resolution focusing on blockchain technology was also passed during Austin’s March 24, 2022 working session. During the meeting, city council member Sabino Renteria explained that Austin started exploring the use of blockchain four years ago to ensure that the city’s homeless population would have control of their personal records at all times. “The concept was what if we use blockchain technology to be able to give folks ownership and access to all of their records,” he remarked. 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. Councilmember Leslie Pool mentioned that her single biggest concern regarding blockchain implementation is its “lack of a central authority.” She added:

“It may be tamper evident and tamper resistant, but that is all that it is. It’s a digital ledger. So there may be some unique uses for this or for the city to promote its use, but at this point, given its relatively recent entry into data storage or other digital arenas, I’m really cautious relating to the city diving into adopting or using it. I very much want to hear from our financial office staff or experts on these technologies before taking decisions to adopt these items.”

Regarding the cryptocurrency resolution put forth, council member Pool added:

“I continue to believe crypto is too volatile, a form of currency to risk tax payer dollars or employee retirements. Crypto is unregulated. It’s not just unregulated. It’s also unprotected. There’s an element for me of gaming involved here. THat leaves me really uneasy. Crypto as a form of payment or investment is inconsistent with the role of a municipality in safeguarding the community’s revenue.”

Austin pushes forward, despite concerns

Concerns aside, Austin residents remain positive regarding cryptocurrency and blockchain innovation within 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 council members and residents on the implications of the recently passed resolutions:

“Some ATX DAO members were at city hall showing our support for the resolutions, yet we still lent some caution because we are still in the early days of crypto. Therefore, it takes time to understand the space before diving into projects.”

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

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

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

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

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

City Magic founder Raffi Sapire told Cointelegraph that the project awards $1,000 grants to those in the Austin community who want to create a friendly space or event for neighbors or for civic engagement. “City Magic is for civically-minded people and for those who care about the community. It also helps build a bridge for people who may not have interacted with tokens before. Grants are NFTs, and the cost to join our committee is equal to one grant that will benefit civic engagement.”

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

Moreover, Austin may soon join the ranks of Miami and New York City by implementing its own CityCoin. A CityCoin community member spoke about how this may play out in a presentation conducted at ETH Austin, a two-day long 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 like Mayor Adler and council member Kelly better understand how Austin’s own cryptocurrency can be successful. “We need to define this and make sure we do it right before we go about anything. Ideally, we’d like to have an announcement on this during Consensus 2022, set to happen on June 9.”

CityCoins community member presenting at ETH Austin. Photo Credit: Rachel Wolfson

When asked about a CityCoin being implemented in Austin, Kelly remarked, “I’m open to the idea, but my financial conclusion of that depends on my resolution passing and knowing that it’s feasible for the city of Austin to accept crypto as a whole.”