Hull City Council Launches New Digital Currency To Ease Recession Worries

Hull City Council has launched the new 'HullCoin' local cryptocurrency to help locals affected by the recession.

A combination of Feathercoin and Ven, HullCoins can be used to pay council taxes and for goods and services from companies that sign up to the scheme.

Hull City Council is mining the currency using computers paid for by a mysterious benefactor, whose one condition was that the windfall would be used to help the people of the city, according to CNET.

Residents with money troubles can take part in voluntary activities and be paid in the new digital currency, deposited into virtual wallets in their computers or smartphones.

"We'll be generating digital tokens which we will distribute into the local economy with our partners, the majority of whom will be charities, community groups and local enterprises. David Shepherdson, from the council.said.

Related: Five cryptocurrency alternatives to BitCoin

The currency can be redeemed at local food banks or at the council itself to subsidise council tax or rent.

Due to the fact that cryptocurrencies are not officially considered valid in the UK, HullCoin payments do not affect people's benefits.

Paul Spooner, a youth project leader in Hull, hailed the idea as an "excellent tool" for boosting young people into voluntary work.

"It recognises the effort people often put into their own self-development and into helping out others as well," he said.

Other UK cities and town have set up their own forms of currency in the past, such as Oxford, Bristol and Lewes, but HullCoin is the first to be based virtually.