A new cash transfer program in New York City is experimenting with cryptocurrency as a payment method, funded by a donation from centralized exchange **Coinbase**.
What Happened
The pilot program, run by the nonprofit GiveDirectly, is providing 160 residents in the South Bronx and East Harlem with the equivalent of $12,000 in USDC, a stablecoin pegged to the U.S. dollar, according to Business Insider.
The initiative mirrors guaranteed basic income projects but introduces two key twists: the use of digital currency and a significant lump-sum payment.
Participants began receiving $800 per month in USDC starting in September. In a departure from traditional models, they also received a single $8,000 distribution in November. The program is scheduled to conclude in February.
According to** Emma Kelsey**, the program lead at GiveDirectly, the decision to include a lump sum was based on prior research and direct community feedback.
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She stated that larger, one-time payments can empower recipients to make substantial investments, such as covering a security deposit or enrolling in an educational program, which smaller recurring payments may not allow.
“We heard from participants that this lump-sum approach could be more valuable for them versus a standard recurring payment model,” Kelsey explained, referencing similar successful programs run by the organization.
The choice to use cryptocurrency marks another distinctive feature of the pilot. Kelsey said the organization is keen to observe if recipients use and perceive crypto payments differently than traditional money.
Why It Matters
New York City was selected for the pilot due to the high economic need in the targeted neighborhoods and a local political environment that has shown some support for digital assets.
Kelsey noted that residents in these areas might also be more receptive to using crypto compared to conventional banking services, making it a suitable testing ground for this new payment method.
The funding for the initiative originated from Coinbase, which donated the funds to GiveDirectly after closing its own philanthropic arm two years ago.
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