The UK-based Hull City Council recently launched what is, perhaps, the first ever local government digital currency. The currency’s architects view cryptocurrencies as a unique opportunity to foster social justice. They hope that the project will help ease the pain of welfare cuts in the midst of a global economic slump.
When I read this yesterday, I quickly Googled to check if it was an April Fool’s joke. But it’s not a surprising development. Everyone seems to be experimenting–successfully or unsuccessfully–with altcoins. Numerous altcoins have cropped up to facilitate various charitable and social projects. Clean Water Coin was launched by a long-standing charity dedicated to spreading clean water. Memorycoin democratically apportions proceeds to charitable projects such as the Electric Frontier Foundation. There’s SaveaPetCoin, Potcoin, and so on and so forth. On the other hand, governments have toyed with local, non-digital currencies time and time again. While many have speculated on the creation of government-sponsored cryptocurrencies, Hull might be the first government, big or small, to actually attempt it.
The city is a consistent supporter of enigmatic technological projects. CNET reports:
Named as the UK City of Culture for 2017, Hull is notable in technology circles for being the only city in this green and pleasant land with its own independent telephone network, complete with unique cream phone boxes and its own local broadband provider, Karoo.
Hullcoin is a cross between Ven and Feathercoin, an engineering choice intended to foster stability. If all goes well, the currency will buttress a new form of welfare. City residents facing troubling times can complete minor tasks for the city government. In return they will receive Hullcoins. Dave Shepherdson, Financial Inclusion Officer for Hull, told CoinDesk:
“It’s about people on low incomes, in financial distress, being able to subsidise to an extent and complement their incomes. As the currency matures, we can extend, so people can pay their rent and utilities, (or) pay for food through this sort of service.”
But the effort is two-pronged. It will help the needy, but the city also hopes the currency will help drive the local economy. Coin users will only be able to purchase products made by merchants that accept the coin, in other words, local merchants and manufacturers. So, the motives are partially protectionist.
Rather than a citizen-sponsored attempt to replace government currency, like Auroracoin in Iceland, Hullcoin is a government-led effort. In fact, while the Icelandic government warned against using digital currencies, this UK city government is embracing its own.