Low-income New Yorkers receive $12,000 in USDC via pilot program
A pilot program administered by GiveDirectly and funded by Coinbase is providing 160 low-income New Yorkers with $12,000 in USDC, a stablecoin pegged to the U.S. dollar. The initiative draws inspiration from universal basic income experiments to study the impact of unconditional cash payments on poverty. Payments consist of a $8,000 lump sum followed by five $800 installments.
The program, funded with about $2.6 million from Coinbase's now-defunct GiveCrypto initiative, aims to alleviate poverty by delivering cryptocurrency directly to recipients. GiveDirectly, a nonprofit focused on cash transfers, is administering the effort, while Coinbase provides the funding. USDC, issued by payments technology company Circle, is designed to track the U.S. dollar's value, making it less volatile than cryptocurrencies like Bitcoin.
Recipients have several options for managing their funds: they can hold it in their Coinbase account, transfer it to a traditional bank account with a 1.75% fee for instant transfers, use a Coinbase debit card, or withdraw cash from an ATM.
This new pilot follows the 2023 shutdown of GiveCrypto, founded by Coinbase CEO Brian Armstrong. A press release from Coinbase stated: "Over the years, GiveCrypto distributed cryptocurrency to thousands of individuals in need, with measured short-term improvements in their outcomes. Unfortunately, we were unable to create a lasting impact with recipients, who returned to the same baseline after payment ceased."
The initiative mirrors universal basic income (UBI) projects, which examine how unconditional payments affect those in poverty. It echoes proposals like that of 2020 presidential candidate Andrew Yang, who advocated for $12,000 annually to all U.S. adults. Evidence on UBI remains mixed: some studies show recipients working less and spending more on leisure, while others indicate debt reduction and lower spending.
A correction to the original reporting clarifies that GiveDirectly administers the program, with Coinbase as the funder.