Humanity Cash

The current thinking around UBI is focused on the impact of economic, technical and social displacement on individuals, but has not yet addressed those very same effects on communities as a whole. Humanity Cash aims to address both by issuing UBI as community currencies, which are designed to encourage patronage with small businesses. In doing so, we create a multiplier effect for every dollar of capital invested. UBI would be issued as community currencies with underlying cash reserves deposited at community banks or Community Development Finance Institutions (CDFIs). The same dollar now helps a family in need, a small business in the neighborhood, and a community bank that is reinvesting the capital in underserved people and small businesses. 

To scale UBI funding, we propose issuing UBI bonds. Impact investors purchase bonds in community currencies, which are then disbursed to families in need, who would spend them at small businesses. 

The problem we're focused on is digital identity and financial inclusion, especially for small businesses. COVID has devastated small businesses, which remain the economic lifeblood for most countries. In the US alone, there are 30 million+ small businesses that account for nearly half of all jobs. Even before the pandemic, small businesses struggled to compete with large corporations due to increasingly concentrated markets. We have lost nearly half of our community banks that serve small businesses in the past 15 years due to financial consolidation and the rise of fintechs. Our community banks are vital to the health of local economies, as they account for half of all small business lending. Smaller banks accounted for 82.4% of all PPP loans administered. According to the Institute for Local Self-Reliance, “states with a robust community banking sector will likely suffer fewer small business losses and less economic damage” due to COVID. Crypto today will only further marginalize community banks. We want to bring our community banks with us, as reserve banks for digitally-enabled community currencies. We will provide user-centric KYC credentials tied to digital wallets that distribute community currencies, which are part of UBI programs or standalone programs to incentivize local shopping. 

We are building a platform that enables any community to issue legally compliant community currencies, that are 1:1 backed by cash reserves held at local banks. Community currencies can be part of a UBI program through our UBI bond platform, whereby the cash reserves of a community currency program is funded by an impact investor who purchases a UBI bond. For example, Humanity Cash would issue a $100 million bond to fund $100 million of Appalachia Dollar, a community currency to support coal miners transitioning to green energy jobs, while helping to revitalize local businesses. The UBI bond would be long-dated, modeled after the $1 billion social bonds issued by Ford Foundation. If the bond cannot be rolled over at maturity, it would convert to a tax-deductible donation (we would also seek Treasury guarantee under the CDFI Bond Guarantee program). Interest on the UBI bond would be paid through interest earned on the underlying cash reserves, deposited at local banks and invested in impact investments. 

Technology-wise, we are using blockchain and smart contracts to efficiently maintain accounting records and automate compliance requirements. Crucially, we are building tech that transparently bridges legacy banking rails with digital finance, including digital identity credentials.   

We want our platform to be something that all underserved communities can benefit from and utilize. We see our constituents as three-fold: 1) people who need financial assistance; 2) small businesses, and 3) socially-impactful community banks and Community Development Financial Institutions (CDFIs). 

Our first pilot will be digitizing an existing local currency called BerkShares (currently paper based), which circulates in the Berkshires region of Massachusetts, a rural county that has historically depended on agriculture. According to US Census data for 2020, the median household income in Berkshires County was $59,230, compared to $68,703 for the U.S. as a whole. We will be conducting a UBI/community currency experiment by giving 100,000 BerkShares (backed by $100,000 USD in reserve at two local community banks) as part of the pilot. (See below for more information on the pilot). Our goal is to digitally follow the money to see how much economic impact or multiplier effect the initial $100,000 of UBI cash injection can have in the local economy. Anecdotally, the Schumacher Center for a New Economics (our partner non-profit and community organization for BerkShares) estimates that the existing paper BerkShares get recirculated at least 3-4x before being redeemed for USD, but there is no hard data with paper BerkShares. 

Through the assistance of two Harvard Law students, who did their semester clinic at the Schumacher Center, we interviewed existing BerkShares users and community members to understand their needs and painpoints. These included retirees, farmers, small business owners, members of the local Chamber of Commerce. Small business owners repeatedly noted the high transaction fees they pay for card payments, which have become even more exacerbated during COVID where cash use has continued to decline (which includes decline in the use of paper-based BerkShares). This presents an opportunity for a digital currency that runs on a low-cost, carbon neutral network. One local merchant, Matt Tannenbaum of the Bookstore in Lennox, said he would be happy to accept BerkShares through a QR code displayed next to his cash register from 1904 because he is proud to be part of BerkShares and what it means as a community member. 

Our audience is not necessarily tech savvy and they are not cryptocurrency enthusiasts. As one local business owner astutely noted, Bitcoin has nothing to do with the Berkshires. Its value is not derived from the success of this community. The cashier at a local grocery store that currently accepts the paper version of BerkShares noted his wariness of the environmental impact of Bitcoin (as explained further below in the technology section, we are partnering with a carbon-neutral blockchain network that uses a different kind of algorithmic mechanism for payment settlement that structurally reduces the energy input required compared to Bitcoin). We do not expect our audience to be tech enthusiasts, as our product design needs to be seamlessly easy to use, while providing the benefits and connection to their community economy that they seek. Smart phone penetration in the region tends to be high, but we also have tools for delivering digital payments for populations that are less connected. For example, we could provide near-field communication (NFC) enabled tap cards for those who do not have phones, a solution that was well-received for the delivery of a digitally-enabled cash assistance pilot by Oxfam Australia in the Pacific Islands of Vanuatu. Simple HTC phones were given to merchants in order to scan and receive funding. 

We are also working with two local community banks. Their interest in participating is to support the community but also to be future-proof with digital currencies. The current trend in crypto is to further concentrate capital around a few large banks and fintech players, which will further marginalize our community banks. Our goal is to create innovative digital products (community currencies and UBI bonds) to funnel deposits towards community banks and keep them competitive. This increases the capital base that these banks can then lend out as small business loans to minority-owned small businesses.

Our community currencies can be geographical/location-based, whereby any citizen can purchase a community currency for patronage of local businesses, with particular focus on UBI benefits being equitably distributed to BIPOC and other vulnerable members of that community. Our goal is to reach as many diverse populations as possible, both rural and urban, including potentially launching a UBI-oriented community currency for the City of New York called Borough Bucks, the brainchild of New York State Assemblymember Ron Kim, whom our CEO Fennie has advised on digital currencies. Borough Bucks has been adopted by Andrew Yang as part of his mayoral platform, proposing to deliver $100 million of UBI through Borough Bucks distribution. $100 million would be deposited at CDFI banks in New York, with $100 million of Borough Bucks issued as claims against those reserves, and distributed to New Yorkers in need, and spent at local small businesses. Ron has proposed that Borough Bucks be backed in part by entitlement programs such as New York City Housing Authority (NYCHA) housing credits. These are effectively dollar-for-dollar claims guaranteed by the federal government that could be liquidated over time to service redemption of Borough Bucks against the USD reserves. 

Likewise, SNAP funding (guarantees made by state and federal governments) could be used to back the issuance of community currencies like Borough Bucks. The country spent $85.6 billion on SNAP in 2020, with 80 percent of SNAP dollars spent at larger stores, 53 percent of purchases occurred at "superstores" (defined as "Big-box stores, food warehouses, and very large supermarkets"), while 29 percent took place at "supermarkets" (defined as grocers with 10 or more checkout lanes). This is despite the fact that roughly 80 percent of authorized SNAP retailers are small or medium-sized businesses, due in part to the difficulty smaller retailers have in accepting SNAP payments online given additional administrative, technical and development costs including new approvals from the USDA, and long and costly integration from legacy banking processors like FiServ. Humanity Cash would address these issues by bypassing or minimizing these legacy banking rails. Our community currencies are natively digital, and we are building easy-to-use and auditable processes to on and off ramp between digital and the legacy banking system, using smart contracts as a way to automate compliance requirements, such as limiting redemptions to cash (by liquidating the SNAP guarantees) to only USDA approved retailers. This would level the playing field for smaller and independent grocers to accept SNAP payments online (and in person), including reducing the audit costs to prove compliance with often onerous program rules. 

In addition to the UBI funding of Borough Bucks, every New Yorker would be encouraged to purchase Borough Bucks as a way of patronizing local New York small businesses. Critical to the success of any currency is wide participation by everyone in that community, as this creates liquidity, broader adoption and a larger capital base for reserves. We want everyone to support their local businesses, especially local minority-owned small businesses and the financial institutions that serve those communities. Importantly, when we rephrase UBI in the context of vibrant communities, not just individuals who are vulnerable or poor, it becomes now relevant to all of us, and thereby a less politically or class divisive issue. Using food stamps, or EBT, notoriously creates a sense of shame for users. Community currencies are the opposite; not merely a neutral and non-stigmatized transaction but a purposeful transaction with a sense of pride and civic engagement. 

When we interviewed people in rural Massachusetts for our BerkShares pilot (described below), pride in their community and the sense of participating in something greater than themselves were themes that came up often. We are currently working on a digital wallet that facilitates storytelling about people in the community, including highlighting small businesses and their entrepreneurs, as well as providing all relevant functionality for consumers, merchants and other stakeholders e.g. receiving and tracking benefits, topping up the community currency and making redemptions to USD, discovering local businesses, etc. Apart from financial assistance, we want to create a product that brings back the joy of interacting with our neighbors. As one of the merchants we interviewed said, what she loves about community currencies like BerkShares is that it makes you stop and have a conversation about what something is, what it means to be part of a local community. We have commodified so much of our world, reducing exchanges between two very real human beings as mere impersonal transactions. Community currencies give us a chance to slow down and realize the small miracle of making an exchange with a neighbor, contributing to our collective wealth and well-being. 

We can also create community currencies that serve a cultural community that expands several geographic jurisdictions. This can include a community currency for the Black community, whereby it is used to incentivize patronage of Black-owned businesses across the US, with underlying reserves deposited at Black-owned banks nationally. Everyone would be encouraged to purchase this token, as that brings deposits into Black-owned banks, while incentivizing for patronage of Black-owned businesses. UBI bonds could also be issued (or through philanthropic dollars) in order to fund specific UBI programs targeting Black communities and Black-owned businesses. 

Similarly, community currency/UBI programs can be created for various Native American tribes/nations. As an example, casinos on Native American land may require patrons to transact in the tribal community currency, which forces tourists to transfer outside funds into Native CDFI banks, and casinos can consequently pay for some of their local expenses in tribal community currency. 

We would like to also replicate this model in the Appalachia region by working with local organizations such as the Foundation for Appalachian Ohio, and local CDFI banks. United Coal Miners Union of America, one of the largest coal mine unions in the country, recently announced its backing of green energy jobs, but asked for financial assistance to help coal miners make that transition. This presents an opportunity for whitespace thinking, and we hope that Humanity Cash can be part of that solution through UBI bonds and community currencies. 

Pew Research Center found that Blacks and Hispanics tend to have similarly high smart phone ownership as whites (about 8 out of 10), although Blacks and Hispanics have significantly lower ownership of desktop or laptop computers, thereby relying more heavily on their smart phones for digital access, job search, and other needs. Black and Hispanics also have a higher mobile phone service cancellation rate than whites due to costs and expenses. As described above, we have tools for delivering digital payments for populations that are less connected through NFC-enabled tap cards (or cards with QR codes).

Our goal is to ensure that all constituents who ought to receive UBI cash assistance gets that funding, while using technology to reduce the administrative costs of managing cash assistance programs and reducing the time to get the money in the hands of the people that need them. We hope to bootstrap community economics through encouraging our funding to flow towards local small businesses, which keep our neighborhoods vibrant and resilient, while keeping capital at our community banks, which provide the majority of loans to small businesses in the U.S. The theme across all of these communities is a desire for greater economic self-sovereignty and dignity, preservation of local culture and values, and becoming reconnected again to each other as a community. Our current financial system has made transactions invisible and commodified, but we seek to make them meaningful again, as not only a commercial transaction but an actual connection between members of a community. 

Currency is one of the most powerful financial tools we have. In the US we are lucky that the USD is a liquid and global currency, but its distribution is uneven. Community banks play an important role in federalizing the US dollar amongst local communities through local loans to financially underserved people and small businesses. As we lose our community banks to digitization and consolidation, underserved communities lose their liquidity. Our solution enables community banks to seamlessly offer a digital payment product, while increasing their deposits, which is loan capital. We also issue digital KYC credentials to streamline compliance requirements. 

Our pilot to digitize BerkShares is expected to launch in December 2021. We plan to distribute approximately $100,000 in fully-funded BerkShares as part of an early UBI experiment, which we hope to distribute to 10,000+ people (20,000 live in Berkshires). This funding was raised from a local philanthropist. BerkShares, a community currency founded in 2006, is currently 1:1 backed by USD held at three local banks. We are working with two of the local banks for digital BerkShares, whereby we keep the same model of having the cash reserves held locally. We have been working hand-in-hand with the local non-profit, Schumacher Center for a New Economics, which originally provided the research support for BerkShares. With the support of Schumacher Center, we are conducting user research into product design, including in-person testing, feedback and training. Our engineers will be in the Berkshires testing the backend with the local banks. 

We hope to engender a multi-billion dollar market for UBI and community currency programs by leveraging ESG capital markets. We don't expect governments to use tax revenue to fund UBI programs. Based on feedback from the Head of Fixed Income ESG at Goldman Sachs, institutional investors are currently even more focused on community than traditional ESG, and he compared UBI bonds to the trillion dollar municipal bond market. 

Our vision is to create a virtuous economic cycle that stimulates local economies from the ground up. The more we can incentivize recirculation of our community currency in the local economy, the fewer the redemptions on reserves, which means we enable the underlying reserves to be put to productive work, which makes the issuance of UBI bonds economically viable, thereby enabling more community currencies to circulate. 

We can create incentives through government programs, such as the CDFI Fund, to provide government guarantees (easier than taxation) or philanthropic dollars to absorb loss in the event of default on a UBI bond. We have spoken to the CDFI Fund Director who was supportive of the idea that UBI bonds could be used to finance the issuance of digital currencies for stimulating small businesses. She said while it would be a novel application for the CDFI to designate a digital currency as a covered financial instrument, she did not believe that would pose a substantive hurdle, provided we could prove that at least 60% of the recipients are at or below the relevant income threshold. 

We hope to serve 5,000-10,000 members of Berkshires County, Massachusetts with our BerkShares pilot with our target pilot launch of December 2021. For 2022, we hope to engage additional pilot projects, such as with Borough Bucks in New York, the brainchild of New York State Assemblyman Ron Kim, whom our CEO has advised, and currently on the platform for former US Presidential candidate Andrew Yang as part of his UBI campaign. We are also laying the seed for additional pilots, such as working with international aid agencies to support a UBI project for rebuilding Gaza, or working with local non-profits and CDFI banks in the Appalachia region to support devastated local economies and coal miners transitioning to green energy jobs, including launching UBI bonds to support larger capital injections. We would like to also approach the nearly 50 mayors who are participating in the Mayors for a Guaranteed Income initiative to launch community currencies for their cities. We hope in a year's time we can serve 20,000-30,000 people and in five years we can serve upwards of 100,000-200,000 or more. These numbers include the number of people who are community currency account holders, including small business owners. Broader but meaningful impacts include the the family members of direct account holders, as well as those who have received productive loans from the local banks based on the deposit capital.

As described above, our direct quantitative metrics would include a) number of people impacted through account sign-ups, b) the amount of money circulating in local economies through community currencies, c) the multiplier effect or velocity of money of the community currencies, d) the amount of money raised for UBI efforts either through philanthropic dollars initially or through issuance of UBI bonds (principal amount), e) studies on lending activity by the local banks in relation to community currency reserve/deposit amounts, f) other quantitative measures of how well the money is being distributed and recirculated, such as understanding average transaction, balance, redemption amounts, identifying how small businesses recirculate community currencies to understand local import-replacement cycles, g) overall user satisfaction scores and surveys understanding how community currencies/UBI funding has improved their quality of life, and h) measuring local economy health looking at municipal tax receipts, small business registrations, employment statistics, changes to median household income, etc. 

Full-time staff: 1

Part-time staff: 1

Full-time contractors: 4

Part-time contractors: 5

Our CEO Fennie Wang has a unique portfolio of skills, enabling her to connect disparate disciplines. She started her career as a bond analyst at JPMorgan, then as a securities and capital markets lawyer at major law firms in New York and London, before becoming a lawyer and entrepreneur in blockchain. Her work in blockchain has spanned digital identity, blockchain for social impact, and decentralized finance. Fennie has advised New York State Assemblyman Ron Kim on digital currencies, the UNDP Migrant Nation project on digital identity, and the Danish Red Cross on its Community Inclusion Currencies. Earlier in her career, she lived in Uganda, working at a local credit union and later helping to found a non-profit providing identity documents to the indigenous. Fennie loves getting in the weeds with the people she serves, including spending a month up in the Berkshires and working as a trainee cashier at the local candy store to understand the payments process. 

Our engineering partner Keyko, as described above in the technology section, has extensive experience building blockchain systems, traditional financial technology, and demonstrated interest in financial inclusion and social impact projects. One of our engineers is a Palestinian living in Palestine, working on a UBI project to help rebuild Gaza after the recent war. 

What is so rewarding about this project is meeting the people we serve, who have so much to teach us about what true wealth means, that what is enriching is the community we build, what we can give back. 

Finding diverse talent in blockchain is without question a difficult challenge, even more challenging than "traditional" tech. Working in the blockchain space, Fennie was often the only woman. In some places, women represented only 10% of the total company of more than 100 people (with nearly zero representation in engineering).

Our current gender breakdown at Humanity Cash is not great, with three out of 11 team members being female (but with female leadership at the top). Our diversity numbers aren't great either, with only two team members being minorities, including one Palestinian developer and Fennie as AAPI. Diversity is important, as it allows us to design for the needs of many underserved communities. For example, our Palestinian developer is working on a UBI initiative for Gaza rebuilding, and will use the code we are developing for Humanity Cash as a template. 

We hope our team becomes more diverse as we expand, drawing minority and women talent to our team, and we endeavor to make extra efforts to seek diverse talents through outreach to minority engineering, business and community networks. At the core of the Humanity Cash culture, irrespective of gender, race, or creed, is the foundational belief that we all need to be responsible, invested neighbors in our communities. It is these values that matter the most to the culture at Humanity Cash and we believe those values will naturally attract a diverse team over time. 

We are looking to access Solve's network of impact doers and impact investors to catalyze the market for UBI bonds. It is also critical that the UBI bond model goes hand-in-hand with community currencies, otherwise there is no potential payback model whereby we can roll bonds at maturity or pay interest. 

Continued funding support for innovative, large scale, long-tail technology is always important as it may take a number of years for us to be profitable. 

We would also welcome MIT and other academic institutions publishing research on our pilot outcomes. 

As described above, we would love to work with Solve's network of impact investors to make UBI bonds (disbursed through community currencies) a market-standard product in ESG capital markets, much like green bonds. In addition, we would like to tap Solve's network to reach strategic partners to expand our product/client base (see below). 

We want to tap MIT/Solve's network for human capital, especially diverse capital that is hard to find in blockchain. 

Finally, MIT is an academic powerhouse that is well suited to do research on pilot outcomes, using verified public on-chain data (e.g. to calculate velocity of money/multiplier effect, etc). 

We would also like support from Solve's network to gain strategic partnerships with companies like Square, where we believe there is both value alignment and business synergies. Square is used by many of our small business retailers and having integration of community currencies in the Square point-of-sale application would facilitate adoption. Square CEO Jack Dorsey is both a big believer of digital currencies and UBI, having donated more than $15 million to the Mayors for a Guaranteed Income group. 

We would also like to partner with impact investors and large financial institutions that have vested interests in developing ESG investment products. This could include foundations like Rockefeller and Ford, pension funds, institutional investors like Blackrock, and investment banks like Goldman Sachs. We would need their buy-in in order to develop UBI bonds as a market standard ESG product. 

We are currently in the early stages of a potential UBI pilot with Mercy Corps to support Palestinians in Gaza, as part of an effort to help rebuild Gaza after the recent war. We would use 100% of the grant for direct disbursements and on-the-ground implementation to Gazans. 

We are working directly on economic opportunity through our community currency and UBI platform, particularly with a focus on small businesses. We would use 100% of the grant for direct disbursements and on-the-ground implementation to communities in need e.g. coal miners in Appalachia looking to transition to green energy jobs. 

We are working directly on economic opportunity through our community currency and UBI platform, particularly with a focus on small businesses and would like to have a community currency to support women owned businesses and women run banks. We would use 100% of the grant for direct disbursements and on-the-ground implementation to communities in need e.g. single working mothers who need some extra support to pay for childcare and groceries. 

On-chain transactions of community currencies provide rich, verified data that machine-learning algorithms can utilize to better understand the flow of money through local economies and how to build local economic resilience. We would use the funding to develop data analytics dashboards and tools for researchers, policymakers and educators. We want to create transparency, auditability and research insights. 

We would be particularly well-suited for this award, given our blockchain-based solution and explicit focus on supporting local communities, economies and small businesses. We would use 100% of the funding for direct cash disbursements (airdrops), which is providing digital currencies as local payments to underserved communities, helping families in need, and patronage and transaction cost savings to small businesses. 

We propose that, in a pilot that also demonstrates unparalleled transparency in philanthropy using blockchain technology, GSR makes its grant in the form of community currencies ($150,000 USD is deposited at CDFI banks, against which 150,000 community currencies are issued), and because community currencies are digital currencies, we can publicly verify that 100% of the $150,000 is directly distributed to wallets belonging to end beneficiaries (while preserving privacy of the personal identifying information of the beneficiaries).