Could Bitcoin serve as a municipal asset to back budgets and expenditures in the future in China?

The People's Bank of China is said to have considered future options for optimization and utilization of Bitcoin and cryptocurrencies.

One possibility espoused recently by Publisher of the famed WebBot Report Cliff High ponders ways to work out the potentials of the currencies in Chinese municipalities.

Each city or village would be given one Bitcoin per village, or a per capita amount each in a city with a large population. Bitcoin, being a truly deflationary currency, would continue to gain in value as it served as a reserve asset. The Bitcoin asset would not be sold, ever.

Instead, it would be used as collateral for loans and funding sources to operate a budget within the municipality. Providing almost guarunteed prosperity (resources can still be misallocated, of course) in perpetuity for the city or village.

Paying the loans back would be done through the collection of taxation in fiat currency within their given jurisdiction allowing for minimal debts that could remain sustainable if properly shepherded.

This could explain China's voracious apetite for Bitcoin, but could also just be a theory espoused in a white paper. Only time will tell.

This same model could, in theory, also be used for County, State, or Nation State level financing along the same lines just at a larger scale.