Rhode Island bill proposes to fix housing crisis with cryptocurrency

Rhode Island State Representative Carlos E. Tobon has proposed an interesting solution to the state’s housing crisis that would, allegedly, also help to address climate change: inventing a new cryptocurrency. H8152, the Green Housing Public-Private Partnership Act, is intended to incentivize the construction of more LEED-certified properties by crediting developers for whatever emissions they manage to reduce. And that would come in the form of a cryptocurrency that I guess would be regulated by the state of Rhode Island but also on the blockchain? Unclear. Here’s the relevant text:

a) The public utility commission shall issue an annual report detailing the reduction in utility costs realized by a housing project under this chapter as a result of the construction standards set pursuant to § 34-37.2-4 and any ongoing efforts to reduce carbon emissions. Any reduction amount of utility costs attributable to any housing construction project pursuant to this chapter shall be assigned a credit amount which credit shall be eligible for redemption in by way of crypto currency in the form of a green coin to be issued by the department to the property owner.

(b) Any revenue generated by the state pursuant to this section because of its status as a twenty-five percent (25%) interest owner, shall be deposited in a restricted receipt account for the purposes of funding future projects under this chapter.

This plan also involves the establishment of a green housing fund using money donated from Rhode Island private banking institutions. I think the Housing Newsletter summarized my concerns pretty well:

First, it’s entirely unclear why Ocean State banks would be willing to “donate” $500 million to the green housing fund the bill proposes to create. Second, it’s very clear that the state is on the hook for $125 million—which will be immediately handed over to developers to build housing projects in the form of what will doubtless be loans on very easy terms. Third, any housing project so built that basically causes state utilities to burn less carbon by being very energy efficient (in terms of both construction and operation) will be “assigned a credit amount” by the state. Finally, and quixotically, the credit will be issued in some kind of supposedly “green” cryptocurrency—and since the state owns a quarter of the stake in every housing project built, a quarter of any “profit realized” will go into the green housing fund to build more housing.

But as with the Underpants Gnomes, an enterprising reporter like myself must ask: How is the new cryptocurrency called for in the bill supposed to generate a profit once issued? 

I guess the cryptocurrency is supposed to incentivize the banks to donate the money? Maybe? And then that cryptocurrency would miraculously increase in value just like Bitcoin because it would somehow become desirable because … reasons? Again, unclear. The only thing I know for certain is that the only thing worse than a nonsense scheme to solve climate change and housing crises with cryptocurrency is to regulate that whole scheme through government (which is also sort of antithetical to the whole point of a decentralized cryptocurrency in the first place?).

‘Green Coin’: Rhode Island lawmakers introduce housing bill leveraging blockchain tech [Wahid Pessarlay / CoinGeek]

R.I. legislator would use cryptocurrency as part of ‘green housing’ program [Edward Fitzpatrick / The Boston Globe]

Image: Bestbudbrian / Wikimedia Commons (CC-BY-SA 3.0)