A group of young New Yorkers is at the heart of a groundbreaking initiative, receiving $12,000 each in cryptocurrency as part of a new guaranteed-income experiment. The project, backed by Coinbase and administered by the nonprofit GiveDirectly, aims to explore cryptocurrency’s potential as a tool for direct financial aid. This pilot program, named Future First, selected 160 residents aged 18 to 30 through a lottery system to receive payments in USDC, a stablecoin pegged to the U.S. dollar. The first distributions began last week via Coinbase wallets, marking a significant move in testing the utility of digital currencies for social welfare.
Testing Crypto as Direct Aid
The Future First program differentiates itself from traditional guaranteed-income trials by its unique payment structure. Instead of regular, smaller installments over an extended period, Future First provides an initial $8,000 lump sum followed by five subsequent deposits of $800 each. This approach, according to GiveDirectly, is intended to empower participants to make substantial financial decisions, such as covering tuition fees or securing a rental deposit.
Coinbase, which previously discontinued its own direct-giving initiative, redirected $2.6 million in remaining funds to support GiveDirectly’s efforts. Darin Carter, who leads U.S. policy and grassroots advocacy at Coinbase, highlighted the dual purpose of the program: providing financial support and educating young New Yorkers about cryptocurrency.
Promises and Pitfalls
The choice to utilize cryptocurrency instead of traditional cash brings both benefits and potential drawbacks. Sending USDC is notably cost-effective, with transaction fees amounting to mere pennies compared to the more expensive prepaid card or bank wire transfers. Nevertheless, critics express concern over the stability of stablecoins. They caution that stablecoins can lose their peg during market volatility, potentially affecting the value of the recipients’ funds.
Moreover, the program’s setup offers participants several options for handling their funds. Recipients can cash out to banks, use Coinbase debit cards for purchases, withdraw money from ATMs, or opt to keep their funds in crypto wallets. The latter choice allows them to earn a 4.1% interest or invest in other digital assets. However, this array of options could lead some participants, especially those new to cryptocurrencies, toward risky financial decisions. Hilary Allen, a law professor at American University, noted that the setup might inadvertently encourage some to engage in speculative trading.
Navigating New Opportunities
Despite potential risks, the program has already garnered positive feedback from some beneficiaries. Take the case of 25-year-old Luis Acero, who expressed gratitude for the financial assistance, stating that it provides him with “a lot of emotional, psychological tranquility.” For many participants, the influx of funds represents a chance to stabilize their finances and explore new opportunities that were previously out of reach.
The program’s leaders plan to conduct surveys with participants after the distributions to assess whether the use of cryptocurrency facilitated new opportunities or erected unforeseen barriers. These evaluations will be crucial in determining the program’s overall success and informing future initiatives aimed at leveraging digital currencies for social betterment.
A Balanced Perspective
While the Future First program is a bold step towards integrating cryptocurrency into social welfare strategies, it also highlights the need for balanced perspectives. On one hand, it offers a glimpse into a future where digital currencies could streamline aid distribution, reduce costs, and empower recipients. On the other hand, it underscores the necessity of considering the financial literacy and market volatility that come with these digital assets.
As the pilot unfolds, stakeholders and observers will be keenly watching to see if the advantages of using cryptocurrency in social programs outweigh the potential risks. The insights gained from this experiment could pave the way for broader adoption of similar models, not just in New York, but globally, where digital financial solutions are increasingly becoming a part of the socio-economic landscape.
With the world closely observing, the Future First program stands as a testament to the evolving intersection of technology and social welfare. Whether it will become a blueprint for future initiatives remains to be seen, but it undeniably marks a significant milestone in the exploration of cryptocurrency’s role in societal development.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
