The mayor of Gold Coast, a city in Australia, Tom Tate is very much keen for the municipality to accept cryptocurrency for rates payment. He suggested paying council rates with digital currencies, despite a $2 trillion crash.
Tate, in an interview with ABC News, said that this sends a signal that the municipality is innovative and bringing in the younger generation. However, the mayor said the municipality is not doing it. But it’s always looking at the next level. Tate’s statement comes as the council prepares to deliver its annual budget. The residents of Gold Coast expect an increase in rates by at least 4% – the highest increase in over a decade.
Adam Poulton, the chair of Blockchain Australia, welcomed the news. He described crypto as “just another form of money”. Its exchange rate is linked to the Australian dollar. Poulton highlighted that with a little bit of software and some applications, one can accept Bitcoin as payment. He explained that people can choose to receive Bitcoin and hold it themselves, or just exchange it for Australian dollars. The fiat currency can turn up in the user’s bank account.
But he also pointed out the innate volatility of the asset class. The Gold Coast municipal council needs to look at its risk appetite. Poulton said the last thing the council would want to do is accept AU$2,000 worth of rates, hold it in Bitcoin, and for Bitcoin price to half. The other risk is that the popular crypto could go up in value and the council would end up having $3,000 – $4,000. Or the council could accept just accept 95% of a rates bill in Australian dollars, and the balance in crypto. By doing so, the council could hold crypto and in the future, it could establish the use cases.
Associate Professor Vallipuram Muthukkumarasamy, from Griffith University’s School of Information and Communication Technology, believes that cryptocurrency remains a speculative investment despite it going mainstream. He says more research and education would be required for digital assets to reach the point of taking over. More training is needed to happen along with confidence building.