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Vitalik Buterin suggested using city cryptocurrencies for taxation and voting

The founder of Ethereum spoke about his vision of using urban cryptocurrencies and their integration in global ecosystems.

At the SG Blockchain Day 2021, the Ethereum founder announced that he is watching with interest the implementation of cryptocurrencies and blockchain in the city management system in different countries. He believes that replenishing the budget of cities like Miami through the release of their own cryptocurrency in the future
will induce citizens to use cryptocurrency for the benefit of themselves and the city. Vitalik Buterin believes that the city’s cryptocurrency can make tax payments more transparent.

“When a citizen pays taxes, a cryptocurrency will be released in the blockchain for an amount equal to the tax payment, and a cryptographic receipt will be generated, proving that the amount of cryptocurrency is equal to the amount of taxes paid. If you don’t want to disclose exactly how much taxes people have paid, there are ways to do it through a zero knowledge protocol. ”

According to Buterin, the system can also be extended to public procurement auctions. In this case, auctions can be held online using the digital currency of the Central Bank, where contractors will submit bids during public tenders. The winner of the auction, who offers the lowest price for services, will be determined by a smart contract.

The Ethereum founder suggested that experiments in blockchain governance could include voting in an urban community. Blockchain will provide transparency and credibility to the process, he said, and zero-knowledge proofs can be included to enhance privacy.

“Even though some of the input data is confidential, you still get cryptographic evidence that voting is proceeding according to the rules.”

Vitalik Buterin believes that it is possible to integrate urban cryptocurrencies with the broader blockchain ecosystem, for example, gain access to DeFi markets if cities want to sell NFTs.

According to the creator of Ethereum, he is now observing a lot of experiments with the urban environment, but the blockchain of cities is still at a very early stage of development. On the one hand, there is no clear plan for how to implement this solution; on the other hand, the lack of experience hides many possibilities.

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