Gold Coast Mayor Tom Tate has suggested that fees could be paid with cryptocurrency in the coming years, despite the market crashing by $2 trillion — more than half of its total value — in the past six months.
Most important points:
- For Gold Coast residents, a rate hike of about 4 percent is expected this year
- It’s the highest in a decade, but below the 5.1 percent CPI
- Mayor says cryptocurrency use would send innovative “signal” to younger taxpayers, but academic says more research is needed
As the council prepares to submit its annual budget on June 14, Gold Coast residents can expect a rate increase of at least 4 percent — the highest increase in 10 years.
But Mr Tate has also announced that the municipality will seek to hire a chief investment officer from the private sector to encourage “innovation” and investigate “joint ventures” under the municipality.
“Why can’t we pay fees for cryptocurrency if the risk isn’t high?” he said.
“It sends a signal that we are innovative and are bringing in the younger generation… [but] I’m not saying we’re doing it, I’m just saying we’re always looking to the next level.”
While a national blockchain industry group has welcomed the prospect, a cryptocurrency researcher has urged more caution.
Council needs ‘risk appetite’
The underlying idea of cryptocurrency is that it creates a payment method that eliminates the intermediarylike a couch.
While many find the technology confusing, Blockchain Australia industry association president Adam Poulton said cryptocurrency is “just another form of money” with an exchange rate pegged to the Australian dollar.
“They can choose to receive that Bitcoin and keep it themselves, or they can actually exchange that Bitcoin for Australian dollars, referring to that exchange rate, and have those Australian dollars show up in their bank account.”
But considering the price fluctuations cryptocurrencies experiencetogether with the existence of scams and the recent market crash, Mr Poulton said: “The council should look at [its] risk appetite”.
“The last thing they would want to do is accept $2,000 in quotes, keep it in Bitcoin, and cut the Bitcoin price in half,” he said.
“The other risk is that the Bitcoin may appreciate in value and they will actually have three or four thousand dollars.”
He said the council could instead accept 95 percent of a fee bill in Australian dollars and the remaining 5 percent in cryptocurrency.
“We’re happy to risk that other five percent and actually keep that and see what future use cases can be leveraged with it,” he said.
“But there are many things you need to familiarize yourself with in order to use and interact with cryptocurrency securely to protect your financial wealth.”
Need more time for education
Associate professor Vallipuram Muthukkumarasamy of Griffith University’s School of Information and Communication Technology said cryptocurrency mainstreaming has been talked about for years, but it still remains a “speculative investment.”
“In 2015, at the time, there was a lot of hype, thinking ‘it’s going to take over in a year or two,'” he said.
He said that while the underlying technology presented “many opportunities”, its implementation was the problem when it came to large bureaucratic organizations such as local government.
“It’s a paradigm shift, it’s a new technology,” he said.
“Council rates, it’s open to that, it’s certainly a possibility, but then adoption, verifying the technology and implementing it, are problems.
“There’s a lot to learn and with that, confidence has to build.”
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