Austin, Texas — The University of Austin, which will open later this year, is trying something new by using bitcoin for its endowment fund. This measure could change the way universities manage their money.
In partnership with Unchained, a local bitcoin financial service, the university received an initial donation of two bitcoins, worth $138,000, from Unchained founder and CEO Joseph Kelly. After gaining approval from the Texas Higher Education Coordinating Board in November, the university plans to welcome its first 100 students this fall to the Scarborough building downtown. Announced in November 2021, the University of Austin aims to offer a different type of education, free from cancel culture and censorship.
Innovative financing strategy
The University of Austin wants to change the usual ways universities are funded by using bitcoin. Bitcoin is a digital currency that works without banks and relies on a network of computers to approve transactions, which are recorded on a blockchain for security. Chad Thevenot, senior vice president for advancement at the university, said the bitcoin endowment will be part of a broader mix of investments, including stocks and other assets.
Long-term Bitcoin plan
The university will maintain the bitcoin endowment for at least five years to help fund its operations. The idea came from chance meetings between Thevenot and Kelly, who works nearby. Thevenot believes this will attract interest from the bitcoin community and align with the university’s progressive approach.
“Bitcoin excites our students and staff,” Thevenot said. “It fits our innovative vision.”
Kelly, motivated by the university’s focus on entrepreneurship, sees this as a way to connect the worlds of academia and bitcoin. He believes that many in the bitcoin community will appreciate the university’s mission and want to support it.
Bitcoin in higher education
While some universities accept donations in cryptocurrency, they typically convert them to avoid price swings. The University of Austin’s decision to maintain its bitcoin donations shows that it believes in the long-term value of bitcoin. Thevenot is not concerned about market fluctuations and considers any amount of bitcoin as profit.
David DeMatthews, a professor of education policy at the University of Texas, said the $5 million donation is not huge, but it serves as a good way to promote bitcoin. Finance professor Cesare Fracassi added that bitcoin donations have similar tax benefits to stock donations, despite bitcoin’s volatility.
Shimon Lazarov, chief marketing officer at Unchained, acknowledged the ups and downs of bitcoin’s price but highlighted its potential for big profits, suggesting the endowment could grow significantly within five years.
Texas and the future of Bitcoin
Carla Reyes, a blockchain expert at Southern Methodist University, calls the University of Austin’s move unusual and exciting. She believes Texas, with its strong tech scene, is a leader in blockchain innovation and hopes other universities will follow suit.
Reyes encourages universities to see the real value of cryptocurrencies and consider partnerships that could generate new funding opportunities.
Thevenot concludes: “By using bitcoin, we accept risk and connect with Austin’s tech community. It’s not just an investment; it’s part of our identity.”
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