Chandler ponders move to cryptocurrency - SanTan Sun News SanTan Sun News

Chandler ponders move to cryptocurrency

June 6th, 2021 development
Chandler ponders move to cryptocurrency

By Kevin Reagan
Staff Writer

The City of Chandler is researching how feasible it may be for residents to use cryptocurrency to pay their utility bills or traffic tickets.

As digital currencies become increasingly prevalent in the modern economy, Chandler is attempting to get ahead of the trend by figuring out whether Bitcoin or Dogecoin could be used some day to pay for public services.

Earlier this month, City Council authorized spending $5,000 for Chandler’s finance department to research the possibility of adding cryptocurrency to the city’s payment methods.

Vice Mayor Mark Stewart spearheaded the research project after he got some inquiries from residents interested in paying their bills with cryptocurrency.

“We just want to look for options for the city,” Stewart said. “I think it could be valuable in the future.”

Chandler will spend the next couple months researching how other cities are handling cryptocurrency, Stewart added, and determining whether it’s a viable venture for the city.

As a city that markets itself as a “community of innovation,” Stewart said it’s time for Chandler to find out how it might enter the crypto marketplace.

If Chandler’s research project were to result in the acceptance of crypto payments, it would not be the first municipality to adopt the digital currency.

A city in North Dakota announced last month it would start accepting cryptocurrency as payment for utility bills. Employees working for the city of Miami have recently been given the option of getting paid in Bitcoin.

Gov. Doug Ducey signed a bill earlier this month that allows the Legislature to establish a special committee to research whether new laws are needed to regulate or support the exchange of cryptocurrency in the state.

Cryptocurrency is often defined as some sort of exchange that is digital, encrypted and decentralized. Unlike banking systems, the value of digital currencies is not maintained nor managed by a single institution.

The concept can be difficult to understand, but each system of cryptocurrency contains a balance of ledgers that are tracked by a community of parties known as “miners,” who digitally timestamp transactions added to the ledger’s blockchain.

Despite frequent endorsements from prominent billionaires like Elon Musk, cryptocurrencies have often attracted criticisms for their unstable currencies and fluctuating values.

In late April, the price of Dogecoin rose and fell multiple times over the course of a couple weeks, stirring investors into a frenzy over the value of their investment.

Cryptocurrency has additionally drawn negative attention for its harmful environmental impact due to the significant amount of electricity needed to mine crypto coins.

The system’s many flaws have resulted in several countries deciding to legally prohibit or discourage the exchange of digital currencies by its citizens.

American regulators appear to be noticing the increasing popularity of cryptocurrency and are trying to figure out how the emerging technology can operate alongside a traditional banking system. 

Later this summer, the Federal Reserve plans to publish a discussion paper that will explore the implications of digital payments, with a particular focus on the possibility of establishing a U.S. central bank digital currency, or CBDC, that could exchange crypto-like currencies. 

On May 20, Federal Reserve Chair Jerome Powell said his agency will be studying how a CBDC could be utilized to improve and stabilize the country’s existing financial system.

“We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks,” Powell said.

Though Powell still finds decentralized cryptocurrencies to be unstable and inconvenient, the chairman believes emerging technological advancements may soon open up new possibilities for how central banks do business.

“Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for CBDCs,” Powell added, “engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process.”