UK City Creates Its Own 'BitCoin' To Pay Residents Tax Free
Hull City Council is creating its own digital currency, similar to Bitcoin, called HullCoin. The council will pay residents with the HullCoins, tax free for voluntary work and the recipients won't lose benefits as a result of their new digital earnings.
The HullCoins themselves will be accepted by the Council as part payment for things like Council Tax and rent payments. But ultimately Hull hopes that a variety of shops will accept the currency everyday items.
Virtual earnings cannot be taxed in the United Kingdom as these currencies are not treated in the same way as traditional money by HMRC or the Department for Work and Pensions, the council said. Although they would run into problems if they attempted to convert the HullCoins into traditional cash.
Dave Shepherdson, from Hull Council, said: “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 new digital currency is "mined" into existence by a computer carrying out complex and specific calculations in the same way as BitCoins are. The council says they have already begun this process, and hope it will be in profit in around 12 weeks.
Hull Council is no stranger to dipping its toes into areas not normally touched by Local Councils. In 1902, Hull Corporation - the forerunner to the Council - established Kingston Communications. For many years the company was a huge source of revenue for the Council. It has now been floated on the stock market.