Research
Jul 22, 2025UBI in the Age of Crypto
Universal Basic Income demonstrates one of blockchain technology's most promising applications, with its fundamental principles relying on the development of compatible worldwide payment systems. Crypto-UBI demonstrates optimism about the technology's potential, economic viability, regulatory requirements, and practical deployment.
Worldcoin is one example that captured international interest because it successfully distributed millions in tokens across millions of users who verified their status. The successful implementation shows that crypto-UBI systems can operate in nations with limited banking infrastructure.
Despite the success of Worldcoin, other projects, such as the Circles UBI Berlin experiment from 2020 to January 2024, encountered obstacles, including technological breakdowns, financial issues, and challenges in merchant participation. This experience highlights the practical barriers to the large-scale implementation of crypto-UBI systems. However, it simultaneously provides an opportunity to learn from both projects that have failed and projects that have succeeded.
The implementation of UBI based on cryptocurrency encounters three substantial economic barriers:
1) External funding enables project sustainability but creates barriers to achieving self-reliance.
2) UBI depends on stable basic income payments, but token prices, which fluctuate, create conflicts with this requirement. The unstable nature of UBI token prices when speculative creates budgeting problems; therefore, stablecoins should be chosen instead of tokens that fluctuate.
3) Economic modeling encounters sustainability as its third primary concern. Although debated, some research indicates that extensive UBI implementation could lead to decreased capital formation and workforce participation, thus requiring developing nations to implement higher taxes for sustainability.
The implementation of cryptocurrency-based Universal Basic Income (UBI) faces multiple economic barriers, changing regulatory systems, and social factors that impact both adoption rates and trust levels, as well as its long-term sustainability.
Current regulations are ambiguous, confusing users. MiCA was the first cryptocurrency legislation by the EU, however many nations lack UBI guidelines. Between 55 and 67 percent of Americans favor Universal Basic Income, according to research, but as seen with bitcoin becoming legal money in El Salvador in 2021, those without internet connection or cryptocurrency knowledge struggle to accept new systems, making blockchain curriculum integration, private key management and blockchain system education essential to increase accessibility for youth.
A successful cryptocurrency-based UBI deployment depends on multiple key elements: stablecoins to ensure price stability, governance systems for community involvement, integration with existing financial infrastructure, and targeted service delivery customized for particular populations rather than a universal model. The next generation of crypto UBI will rely on combined blockchain and conventional system implementations. The most effective implementation methods for achieving the best outcomes include government digital currencies, stablecoin distribution, and public-private sector collaborations.
A cryptocurrency-based UBI system is theoretically feasible, provided all requirements are fulfilled. The global implementation of blockchain depends on scalability progress, together with sustainable funding mechanisms and regulatory framework development.
National programs can take years to complete, whereas worldwide systems require even longer periods. The viability and feasibility of UBI from a technical perspective has been demonstrated through government CBDC experiments, blockchain infrastructure improvements, and community pilot projects.
Conclusion
The continued development, adoption, and progress of UBI require additional time to build supporting infrastructure, provide further education, drive technological innovations, and achieve economic stability, all of which depend on societal approval. This approval, in turn, hinges on gaining public trust and acceptance before UBI can reach mainstream status.
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