Future Tense

Congressman Says a “WallCoin” Could Fund Trump’s Border Wall

A wall of cryptocurrency.
Ohio Rep. Warren Davidson introduced a bill that would the government to raise funds for the border wall with cryptocurrency. Photo illustration by Slate. Photos by Rodion Kutsaev on Unsplash and iridi/iStock/Getty Images Plus.

Ohio Rep. Warren Davidson has drafted a bill, called the “Buy a Brick, Build a Wall Act,” that he says would enable the government to raise money for a border wall by creating a cryptocurrency. President Trump is currently threatening to partially shut down the government if Democrats do not acquiesce to his demand for $5 billion in funding for a wall.

The bill itself, which Davidson submitted on Nov. 30, makes no explicit mention of cryptocurrency, but rather allows the Secretary of the Treasury to accept monetary gifts on the condition that it be used for a border wall. However, Davidson on Wednesday elaborated to NPR on the form that those gifts could take. “You could do with this sort of, like, crowdfunding site,” he said. “Or you could even do blockchain, and you could have wall coins.” Under Davidson’s proposal, the government would set up a public website to electronically accept donations for a “Border Wall Trust Fund.”

Raising money through cryptocurrency typically involves an initial coin offering, a process through which tokens are distributed to investors. ICOs have gained notoriety for losing investors’ money: It’s estimated that 85 percent of ICOs are scams and that 56 percent of cryptocurrencies fail within four months of their debut. Davidson in fact announced earlier this month that he is drafting legislation to regulate ICOs and create an “asset class” for cryptocurrencies, rather than considering them as securities.

Since Davidson has so far only mentioned the idea of a “wall coin” in the NPR interview, it’s unclear if he was just spitballing or presaging a future endeavor. (He didn’t respond to Slate’s interview request, so we couldn’t ask him.) His proposal, if it ever did come to fruition, wouldn’t be the first attempt by a government to develop a cryptocurrency to raise funds.

Venezuela president Nicolás Maduro has infamously championed a national cryptocurrency called the Petro throughout 2018 that was supposed to be pegged to oil reserves and the country’s fiat currency. The goal of the Petro was apparently to bail out Venezuela’s imploding economy, but it seems that the country never actually produced a functioning cryptocurrency.

The city of Berkeley in California is also reportedly charging forward with an initiative to develop a cryptocurrency backed by municipal bonds in order to raise funds for alleviating homelessness and its affordable housing shortage. The city has pitched the token as a way to establish more economic independence from the federal government. Trump has threatened to revoke funding from U.C. Berkeley after riots caused Milo Yiannopoulos to cancel a speech there.

Perhaps the most telling aspect of Davidson’s plan has more to do with the struggle to find funding than with cryptocurrencies. During the 2016 presidential campaign, Trump repeatedly boasted that he would be able to strong-arm Mexico into paying for a wall. He claimed during a debate that the money would come by increasing visa and border crossing fees, impounding remittance payments, raising tariffs, and generally applying financial pressure. That hasn’t happened. Trump then claimed Mexico would pay for the wall indirectly through a renegotiated trade agreement to replace NAFTA. He later suggested that solar panels affixed to the wall’s surface would create enough energy to pay for itself. Now, with the looming threat of a shutdown, we’ve come to the point where cryptocurrency has been added to a list of increasingly unlikely proposals for wall funding.