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The Payments: $12,000 in a Stablecoin
Select New Yorkers are set to receive $12,000 worth of cryptocurrency payments thanks to a new program by GiveDirectly, a nonprofit focused on alleviating poverty by giving cash directly to people. The program is funded by Coinbase—a cryptocurrency exchange.
According to a Bloomberg report, this pilot program provides 160 low-income New Yorkers with $12,000 worth of USDC, a type of stablecoin pegged to the U.S. dollar, and will be paid out in one lump-sum of $8,000 and five smaller payments of $800 each.
USDC is issued by Circle, a payments technology company. USDC is considered far less volatile than cryptocurrencies like Bitcoin because it’s intended to closely track the price of the U.S. dollar.
Recipients will have a few options for how they can choose to spend or hold on to their money. They can either leave it in their Coinbase account, transfer it to a traditional bank account (instant transfers have a 1.75% fee), use a Coinbase debit card or withdraw it from an ATM as cash.
New Initiative Follows on the Heels of Other UBI Programs
While the program is administered by GiveDirectly, the new program comes about as a result of another initiative run by Coinbase that was shut down in 2023. The previous initiative, known as GiveCrypto, was founded by Coinbase CEO Brian Armstrong.
According to Bloomberg, about $2.6 million of the funds remaining from GiveCrypto were allocated towards this new program.
Why This Matters
In recent years, the idea of a universal basic income (UBI) has gained traction. Andrew Yang, a presidential candidate in 2020, proposed giving all U.S. adults a universal basic income of $12,000 a year ($1,000 per month).
“Over the years, GiveCrypto distributed cryptocurrency to thousands of individuals in need, with measured short-term improvements in their outcomes,” the press release announcing the program’s shutdown states. “Unfortunately, we were unable to create a lasting impact with recipients, who returned to the same baseline after payment ceased.”
The new program is meant to mirror universal basic income (UBI) projects, which study the impact that providing people with unconditional cash payments has on poverty.
So far the evidence for UBI has been mixed. Some research found that people worked less and spent more time on leisure after receiving UBI, while another study found that UBI resulted in recipients paying down debt and reducing their spending.