The idea of a Universal Basic Income is currently experiencing a renaissance, being championed by a growing movement of politicians and thinkers. The idea is to provide every citizen with an unconditional income stream, so they can spend it on whatever they choose. However, to date most implementations have had four main drawbacks:
- They are not universal, because not enough money is available to fund a true UBI, due to the lack of support for such high taxes.
- They are funded by a coersive system of taxation, which fiscally conservative people become increasingly suspicious of at the required scale.
- A city that issues UBI on a local level can see that money leave the city, as people and businesses pay online retailers and suppliers in a global economy.
- The cost of living varies from place to place, so different amounts of money constitute a “minimum” income
What if we could fix all four problems? That is exactly what Intercoin is working to accomplish with the Voluntary Basic Income. Read on to find out how.
Local Community Currencies
The core idea is to let each town issue its own currency, and get local merchants to accept it. By doing this, the town gains the ability to run their own monetary policy and fiscal policy. Then they can issue a UBI in that currency, thereby ensuring it gets spent in the local economy.
Local merchants can make available all the goods and services that people need for a basic standard of living. Food, housing, utilities, doctors, and basic necessities can be obtained locally. Basic income given as local currency ensures that it gets spent into the local economy, as opposed to federal fiat currency which can be spent out of the town (by consumers ordering online, or by merchants paying their suppliers and shareholders).
In addition, in this setup, there is no element (the proverbian “men with guns”) that is normally associated with tax collection. Rather, a merchant’s decision to accept the currency is completely voluntary, similarly to how they choose accept VISA or Mastercard payments, even though they pay larger transaction fees. Similarly, employees can choose to get paid in the local currency, while locals and visitors can buy the currency to spend at local establishments.
The town’s citizens can democratically vote to issue more currency and use it to fund the UBI for themselves. This is balanced by demand for the currency as it is adopted more and more by merchants, employees, locals and visitors. Currency can also be withdrawn from circulation by transaction fees and local taxes. The town gets a lot more control over its own economy.
Cryptocurrency for UBI
In the last 10 years, decentralized, cryptographically secure network protocols have enabled the rise of trust-less infrastructure and unleashed a new boom in decentralized fintech innovation.
The early days of the World Wide Web witnessed an explosion of new value creation. Where once you needed permission and expensive infrastructure (such as a TV station), you now just need a laptop and people to write some code. Both the software developers who produce the solutions, and the people who use them, can be located anywhere in the world.
The same situation is now happening with financial applications. Fintech is beginning to transcend geographic boundaries just as web publishing did 25 years earlier. Money can become programmable, and thus smarter and more useful for entire communities.
Applications running on these decentralized crypto protocols have the ability to implement Universal Basic Income, and much more, in ways that may not have been possible even a couple decades ago. Airdrops of cryptocurrency have been done for years, and UBI is, in some ways, a continuous version of that.
People around the world will need to look beyond national governments for ways to stabilize their local economies. Countries like Venezuela and Lebanon today are in dire need of solutions that will come from outside their own national governments, as they face looming economic collapse.
Crypto projects like Bitcoin and Ethereum have already been having a major impact helping many people amid a failing national money supply. But their protocols are not scalable enough to power everyday payments and elections. That’s why we are building a new platform that can power applications like UBI for entire communities.
Here is the roadmap for how it should be rolled out: