The city of Kingston upon Hull located in the United Kingdom has released its plans to unveil a new cryptocurrency: Hullcoin. They first announced the digital currency, along with their plans to fight poverty in the region, over a year ago. Revelations of how the coin would actually operate were detailed by the local Hull Daily Mail, with a release date set for October.
Hullcoin will be introduced as a local government-backed digital currency. In exchange for voluntary works with the city, citizens would then receive the coin like a digital rewards program. The project is lead by Hull-born John Rogers, who believes the coin could help battle austerity. Rogers told the Daily Mail:
"HullCoin [...] is one of the systems with the most potential to address [austerity] and it could make a big difference to people's lives.”
The coin, launched last year on April 1, was at first thought to be an April Fool’s joke. Hull City Council believes the coin will tackle poverty and add incentive to a communal economy. The coins can be used to pay the city’s taxes and rent, and to buy goods from local grocers and clothing stores.
The council debated whether the currency could be used in its High Street shops, which are more high-end retail. The currency is currently unrecognized by the UK government, and there are other alternative currencies in the region as well. The locally printed Brixton Pound is a paper currency also produced in the area to support the local economy.
Hullcoin uses mining scripts from Ven and Feathercoin. The mix of the two adds more stability to the currency’s volatility. The mining rig they use, located in Kingston, was donated by an anonymous donor. The council estimated that it would take roughly 12 weeks to mine enough coins to power the project. The rig boasts two Sapphire R9 290X graphics cards.
With the city council at the helm of mining operations, the coin’s dispersal is centrally controlled, as the public will never mine it. Dave Shepherdson, the council's Financial Inclusion Support Officer, told the Telegraph:
"The idea is that we'll provide it to people on low incomes for them to pay for things that they wouldn't otherwise be able to pay for, particularly food and fuel. It's a very different sort of project,"
The virtual city money is not taxable and does not affect existing government dependence programs. The HMRC, which handles revenue and customs, will not treat the currency in a traditional manner, said the Hull Council.
Shepherdson said problems could arise if people tried to exchange the digital currency for cash. The currency is meant for struggling residents to perform voluntary work and receive Hullcoin as means of payment. The hope of the team is to get city investors and businesses on board with the reward system. If the group is successful, the plan is to expand into a “digital bank of Hull,” providing crypto resources to the Kingston region. Shepherdson said:
"Every HullCoin that is issued will be traceable, so there will be a story behind it.”
This is not the first try at a digital currency created to help a local economy. Ithaca, NY recently launched the Ithaca dollar, and the Oglala Lakota Nation launched MazaCoin last year.