New York Residents to Receive $12,000 in Crypto in New UBI Pilot Program

A New Chapter for Social Aid: Crypto Enters the UBI Conversation

In a groundbreaking move that merges cryptocurrency with social welfare, select low-income residents in New York are set to receive <$12,000 in crypto> through an innovative pilot program. This initiative, run by the nonprofit GiveDirectly and funded by the crypto exchange giant Coinbase, aims to explore a new model for poverty alleviation by providing direct, unconditional cash payments in the form of a digital currency.

The program is a real-world test case for two rapidly evolving concepts: the utility of cryptocurrency in everyday life and the effectiveness of Universal Basic Income (UBI). Let’s dive into how this program works, where the money comes from, and what it could mean for the future of charitable giving.

How the $12,000 Crypto Program Works

This pilot program targets 160 low-income individuals in New York, providing them with significant financial support over a period of several months. Here’s a breakdown of the key details:

• Total Amount: Each participant will receive a total of $12,000.
• Payment Structure: The funds are distributed with an initial lump-sum payment of $8,000, followed by five smaller monthly payments of $800 each.
• The Currency: Payments are made in USDC (USD Coin), a popular stablecoin.

Why USDC? Understanding Stablecoins

Unlike volatile cryptocurrencies like Bitcoin or Ethereum, whose prices can swing dramatically, USDC is a stablecoin. This means it is pegged 1:1 to the U.S. dollar. For every one USDC in circulation, there is one U.S. dollar held in reserve, ensuring its value remains stable at approximately $1.00.

Using a stablecoin like USDC, which is issued by the payments company Circle, is crucial for a program like this. It ensures that recipients receive the full intended value of their payments without the risk of losing money due to market volatility, combining the stability of traditional currency with the efficiency of blockchain technology.

From Crypto Wallet to Cash: How Recipients Can Access Their Funds

A major focus of the program is providing flexibility and real-world usability. Recipients will receive the funds in a Coinbase account and have several options for accessing and using their money:

• Hold or Invest: They can keep the USDC in their Coinbase account.
• Bank Transfer: Funds can be transferred directly to a traditional bank account. While standard transfers are free, instant transfers come with a 1.75% fee.
• Spend Directly: A Coinbase debit card allows recipients to spend their funds directly at stores or online, just like a regular debit card.
• Withdraw Cash: Participants can withdraw their funds as cash from an ATM.

The Story Behind the Funding: A Second Chance for GiveCrypto

The funding for this new program comes from the remnants of a previous Coinbase-backed initiative called GiveCrypto. Founded by Coinbase CEO Brian Armstrong, GiveCrypto aimed to distribute cryptocurrency to people in need. However, the organization was shut down in 2023.

In a press release, the team behind GiveCrypto noted that while they saw short-term improvements in recipients’ lives, they were “unable to create a lasting impact with recipients, who returned to the same baseline after payment ceased.”

Approximately $2.6 million from GiveCrypto’s remaining funds have been reallocated to this new, more structured UBI-style program with GiveDirectly, hoping a different approach might yield more sustainable results.

Is This the Future of Universal Basic Income (UBI)?

At its core, this program is a social experiment designed to mirror Universal Basic Income projects. The idea of UBI—providing regular, unconditional cash payments to a population—gained mainstream attention during Andrew Yang’s 2020 presidential campaign, where he proposed a “Freedom Dividend” of $1,000 per month for every American adult.

Proponents argue that UBI can provide a crucial safety net, reduce poverty, and improve health outcomes. However, research on its effects has been mixed. Some studies have found that recipients pay down debt and reduce spending, while others have pointed to participants working less and spending more time on leisure.

By using crypto, this New York program adds a new variable to the UBI experiment. It will test not only the impact of direct cash aid but also the feasibility of using digital assets as a primary distribution method. The results of this pilot will be watched closely by economists, policymakers, and the crypto community alike, as it could pave the way for a new model of tech-driven social support.