The BLOCKchain of Opportunity Zones: Feature Interview With Jomari Peterson of Gama Ventures
In late 2017, a bill co-sponsored by Sen. Tim Scott (R-South Carolina) and Sen. Cory Booker (D-New Jersey) was added to the Tax Cuts and Jobs Act. The aim? To provide an incentive for individuals to invest and re-invest unrealized capital gains in high-poverty areas known as Opportunity Zones.
Signed by President Trump into the law in late 2017, the Investing in Opportunity Act and Opportunity Zone Investment program allows investors the ability to benefit from Qualified Opportunity Zones and Qualified Opportunity Funds. This unique provision of the tax code exists at a time when more than $2 trillion in unrealized gains sit on the ledgers of investors and corporations, according to the Washington, D.C. based Economic Innovation Group.
Investments can be directed toward acquiring commercial real estate or opening or expanding a business in an opportunity zone locale. Those who invest for ten years would eliminate any federal taxes accrued on those gains while fueling economic development through poverty reduction and job creation.
This tax incentive has been widely hailed as an innovative approach to mitigating investment risk associated with low-income communities while eliminating tax liabilities. U.S. Treasury Secretary Steven T. Mnuchin has, in fact, predicted that this federal initiative could reap an estimated $100 billion of investments.
At the time of this writing, over 8,764 zones (or 1 in 8 U.S. Census tracts) have been designated across all 50 states, the District of Columbia, and five U.S. territories. By way of example, California has 879 opportunity zones. And all of Puerto Rico falls under the opportunity zone provision.
Where Blockchain and Opportunity Zones Collide
Taxation is a growing concern among many in the cryptocurrency community. With capital gains likely to rise on the heels of the 2019 crypto bull run, taxes will continue to garner increasing attention among investors.
The aforementioned tax legislation, however, may offer some good news with respect to these valuations gains. At the epicenter of this is San Francisco blockchain innovator Jomari Peterson. His new project known as Gama Ventures is a blockchain centric Qualified Opportunity Zone fund that aims to fuel the growth and development of distressed communities.
Gama is being developed with the intent to foster revenue sharing and micro-equity investments targeting commercial development, housing other economic development initiatives for distressed areas. The end goal is to allow investors to reduce or eliminate their capital gain burdens while providing a meaningful infusion of funds to communities in need.
According to Peterson the ideal for Gama One Ventures came while he was completing some innovation +govtech work with the City of Vallejo (California). At the time he was responsible for assisting with the process of lobbying and positioning the city’s opportunity zone.”
Says Peterson: As I dug deeper and dug deeper into the broader fundraising process, I began to see a lack of representation and commitment to implementing visions that were innovative and that truly had the citizens of the community in mind.
He now believes the rise of Bitcoin and other forms of cryptocurrency offer a unique set of Opportunity Zone investment, particularly for high net worth individuals overseas who remain under the watchful eye of U.S. tax authorities.
Says Peterson: “The repatriation of crypto funds from overseas offers a unique investment strategy for those looking to mitigate their tax liability while developing and maintain their long term wealth. It offers a great way to make a meaningful impact by productively investing in communities of need.”
Through the effective deployment of blockchain technology, Gama Ventures is erecting smart contracts and automated systems to create transparency, access, and flexibility for its stakeholders. The grand vision, says Peterson, “is to bring together a community of partners around an operational model that fosters multi-stakeholder participation in opportunity fund management.”
Responding to some critics who fear that the new opportunity zone tax provisions will lead to the gentrification and displacement of communities of color, Peterson says that his efforts in aligning economic development incentives for the benefit marginalized communities and populations provide him with a unique perspective for championing Opportunity Zones.
Peterson concludes: We see our work as a representative process that builds off of the immense upside of investing in historically distressed and disenfranchised communities. Our goal is to support projects that encourage community wealth building and sustainable long-term growth.