Key Takeaways:
- A total of 160 New Yorkers aged 18 to 30 were selected to receive $12,000 in USDC, a dollar-pegged stablecoin, via Coinbase wallets. Payments are delivered mostly in a lump sum with some smaller installments.
- The pilot program, managed by GiveDirectly and funded by Coinbase, explores how crypto-based financial aid compares with traditional cash transfers.
- Recipients have the flexibility to hold funds in crypto, convert to cash, or use Coinbase debit cards, raising questions about financial risk, speculation, and real-world usability.
Crypto as a Direct Aid Experiment
The initiative, called Future First, targets young adults in New York and is funded by Coinbase with administration by nonprofit GiveDirectly, an organization experienced in cash transfer programs worldwide. Unlike typical guaranteed income trials that rely on small, repeated payments, Future First provides a one-time $8,000 payment along with five smaller $800 installments. This structure is designed to help participants cover major expenses such as rent deposits or tuition fees.
Coinbase previously ran its own direct-aid project but redirected $2.6 million of leftover funds to GiveDirectly to support this pilot. Darin Carter, Coinbase’s U.S. policy and advocacy lead, told Bloomberg that the program aims to provide “financial support and cryptocurrency education resources to young New Yorkers.”
Benefits and Potential Pitfalls
Using cryptocurrency instead of cash offers efficiency but comes with potential risks. GiveDirectly reports that sending USDC costs only a few cents per transaction, making it far cheaper than prepaid cards or bank transfers. Critics warn, however, that stablecoins could temporarily lose their dollar peg during market volatility, and young recipients may be tempted to speculate on their unexpected windfall.
Participants can withdraw funds to bank accounts, use Coinbase debit cards, access ATMs, keep USDC in wallets to earn 4.1% annual interest, or trade for other digital assets. Hillary Allen, a law professor at American University, told Bloomberg that such options may encourage some users to take risky financial bets.
Program leaders plan to survey recipients after the pilot ends to determine whether distributing crypto opens new opportunities or creates barriers. Meanwhile, some beneficiaries, like 25-year-old Luis Acero, have expressed gratitude. “This will give me a lot of emotional and psychological relief,” he said.
