The cryptocurrency exchange Coinbase will soon ask investors to buy into the business with an initial public offering.
But Coinbase Chief Executive Brian Armstrong has another proposal for people who want to dive into the world of virtual currency.
Armstrong’s charity, GiveCrypto.org, is recruiting “ambassadors” to find needy people who could benefit from cryptocurrency donations.
The ambassador program marks a new chapter for the charity, which Armstrong, whose current net worth is estimated at around $6.5 billion, founded in 2018.
“We’re very much disciples of the direct cash-transfer philosophy,” GiveCrypto CEO Joe Waltman told MarketWatch.
He said he’s heard criticism that just handing people money isn’t effective because recipients can’t always be trusted to use it wisely, but he rejects that line of thinking.
GiveCrypto isn’t a registered charity, but it has a nonprofit fiscal sponsor, an arrangement that allows donors to claim a tax deduction for their contributions.
Helping unbanked people
One of the organization’s priorities is to help unbanked people gain access to basic financial services — particularly women living in poverty.
Globally, an estimated two billion people have cell phones, but don’t have bank accounts, Armstrong explained when he launched GiveCrypto in 2018, citing data from the Bill and Melinda Gates Foundation.
Those phones could be used to set up a cryptocurrency wallet, and with a donation of virtual currency, the user could either cash out the currency to buy goods or services, or hold onto it for potential investment returns.
GiveCrypto focuses on making donations to people living in places with broken financial systems, including Venezuela, where hyperinflation has made smaller fiat currency bills worthless.
The organization’s goal is to “raise funds from early crypto holders and distribute payments to people all over the world who are either living in poverty or going through some sort of economic crisis,” according to Armstrong’s mission statement.
Experimenting with how to get cryptocurrency to people in need
“We have this new technology at our disposal and we wanted to figure out how to leverage it to help people,” Waltman said. That has proved challenging.
GiveCrypto has tested a few different methods of getting cryptocurrency into the hands of needy people.
One was a “donation marketplace” similar to GoFundMe where people could sign up to be a recipient and visitors to the site could choose to donate to them.
That didn’t work very well, Waltman said. “We learned the perhaps predictable lesson that it’s really hard to get people to give money to strangers on the internet,” he said.
‘We have this new technology at our disposal and we wanted to figure out how to leverage it to help people.’
GiveCrypto has also experimented with small pilot programs targeting people experiencing unique financial challenges. One gave nine domestic abuse survivors in the U.S. $2,500 donations that they spent on things like first and last month’s rent on a new apartment for themselves and their children, Waltman said.
Digital currency is useful in situations where an abuser is controlling someone’s money, because it can be transferred in a “relatively clandestine manner,” he said.
The charity also facilitated donating cryptocurrency to Rohingya refugees in Bangladesh through a local person who found 21 recipients, set up their phones to receive $10 a week in donations, and convinced a vendor in a refugee camp to…