In a blog post published on Sunday, Ethereum (ETH) co-founder Vitalik Buterin voiced his back up for utilizing the cryptocurrency phenomena to serve the interests of local governments and their citizens.

Specifically, Buterin discussed the formation of urban center tokens and decentralized autonomous organizations, known as DAOs. DAOs are self-governing organizations where users draft and enforce rules themselves, such every bit voting on protocol amendments based on the amount of the underlying crypto tokens they agree.

The idea is notwithstanding in its infancy. Yet, Buterin claimed that city tokens should satisfy at least 3 of the following five objectives:

  1. Act as a sustainable sources of revenue for the regime
  2. Facilitate economic cooperation betwixt residents and the city
  3. Promote saving and wealth-building for all stakeholders
  4. Encourage city-broad social initiatives
  5. Reduce wealth inequality

Regarding the last point, Buterin proposed that the vast majority of newly issued city tokens should go to residents as a form of universal basic income. The Ethereum co-founder critiqued current economic mechanisms as favoring "wealthy people over poor people."

The virtually prominent crypto city project outlined in the blog post is CityCoins, which is built on the Stacks (STX) blockchain. Stacks is a layer-one solution that enables smart contracts on the Bitcoin (BTC) network. The protocol allocates 30% of BTC mining acquirement forwarded to STX holders into a wallet reserved for each city.

Theoretical uses include discounts and benefits provided by local businesses to CityCoin holders. The grouping has already launched 1 such type of city token, the MiamiCoin. Miami Mayor Francis Sanchez has publicly endorsed it, saying it could "revolutionize the manner governments are funded".

Socio-economic effects aside, Buterin likewise praised the potential of city tokens to improve existing governance:

"21st-century digital democracy through real-time online quadratic voting and funding could plausibly do a much ameliorate task than 20th-century democracy, which seems in practice to have been largely characterized by rigid building codes and obstruction at planning and permitting hearings. And of course, if you lot're going to utilise blockchains to secure voting, starting off by doing it with fancy new kinds of votes seems far more than prophylactic and politically feasible than re-fitting existing voting systems."