Forward-thinking municipal government officials are exploring the possibilities of cryptocurrencies and blockchain technology. Several cities around the world are developing crypto coins, for use either as securities or as currencies.

Among them, Berkeley, California intends to produce an initial coin offering, backed by municipal bonds, as an investment vehicle to help finance needed infrastructure improvements, as well as affordable housing. In Hull, United Kingdom, the HullCoin digital token is being touted as a “social” cryptocurrency to reward volunteers in the community with discounts for local goods and services. And in Dubai, United Arab Emirates, the primary aim for the emCoin is to smooth digital transactions with city agencies.

If these pioneering projects are successful, more cities and communities are likely to take notice and either develop their own blockchain networks and crypto coins, or join larger networks. The Berkeley cryptocurrency may be particularly significant if it results in a feasible and effective way to raise new financing for aging infrastructure.

Reducing Homelessness in Berkeley

The Berkeley project, recently announced by Mayor Jesse Arreguin and City Council member Ben Bartlett, has garnered attention as a potential source of new financing for city needs, including affordable housing for hundreds of homeless people. The city is partnering with Neighborly, a public finance fintech company, along with the UC Berkeley Blockchain Lab, to launch the Berkeley Blockchain Initiative. Its goal is to create a first-of-its-kind tokenized municipal bond that complies with all regulatory requirements.

“Blockchain’s benefits, such as security, efficiency, transparency and speed, are not only applicable, but much needed at the government level to deliver better and more streamlined services to the people who need it most,” Bartlett said.

Social Crypto Coins in Hull, UK

The port city of Hull, along Britain’s northeastern coast, is pioneering a form of digital currency called the HullCoin primarily as a social experiment to stimulate volunteerism and good works. Volunteers can earn HullCoins—distributed as digital QR codes—and use them to buy discounted goods services in the community.

The project, expected to launch this spring, rewards volunteers for teaching children to read, setting up a local activity for seniors, and even giving up smoking. David Shepherdson, co-founder of Kaini Industries, the nonprofit setting up the technology, describes HullCoins as community loyalty cards.

The volunteer work performed is embedded into the coin token. Using blockchain, this creates a distributed ledger of the socially good things happening in the community and gives people a “resume” of their social activities that they can show to an employer. “It’s great knowing that you have a blockchain application that changes people’s lives for the better,” Shepherdson wrote on Twitter.

Dubai’s emCash

A partnership is developing emCash cryptocurrency to facilitate financial transactions through contactless payment. EmCredit, a subsidiary of Dubai Economy, the city’s economy department, and the U.K.-based Object Tech Group, are developing emCash to enable people to pay for utility bills, school charges and other government and nongovernment goods and services. The virtual money will be available through the emPay wallet.

On the emPay platform, customers will be able to choose between payment in dirham, the United Arab Emirates’ currency, or emCash. The dirham payment goes through normal settlement procedures and intermediaries, while emCash payments are settled directly between the user and merchant.

“A digital currency has varied advantages – faster processing, improved delivery time, less complexity and cost, to name a few. It will change the way people live and do business in Dubai, and mark a giant leap for the city in harnessing game-changing innovations to improve ease of business and quality of life,” Ali Ibrahim, deputy director general of Dubai Economy, said in a news release.