How exactly does Glo generate basic income and lift people out of extreme poverty?

Glo is an alternative version of the US dollar with an added property: it lifts people out of extreme poverty.

That's why we call it the ethical currency.

Glo presents a new way for people and companies to help fight extreme poverty. You can participate by swapping some of your normal money to Glo.

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Say you want to put $1000 in Glo. Here's what happens:

• You send us $1000.
• In return, we create 1000 Glo and send it to you.
• Glo is a cryptocurrency, so we send the 1000 Glo on the blockchain and you receive it in your crypto wallet. We don't like crypto for the sake of crypto—it's just the only viable way to create a new currency.
• We put your $1000 in the Glo reserve. Keeping it there is how we make sure your 1000 Glo stays worth $1000. Every Glo that exists is backed by one US dollar in the Glo reserve.
• You can always convert your Glo back to regular US dollars if you need the money, so you're not losing any money in the process.
• So how does Glo generate basic income? The trick is that we don't literally keep your $1000 sitting in a bank account. We invest a part of it in 3-month T-bills, a type of US government bond.
• 3-month T-bills are about the least risky investment you can think of. For that reason, they are often categorized as "cash or cash equivalents".
• Still, they generate a small interest. This varies, but our rough assumption is that the Glo reserve will return about 2.5% per year on average. That means every $1000 in the Glo reserve generates $25 per year of profit.
• We give 100% of this profit away as basic income to people living in extreme poverty.
• Each recipient gets $1 a day, which is often enough to lift them above the extreme poverty line.

How do we get the money to recipients in extreme poverty? 

We distribute basic income by donating our profits to GiveDirectly, an NGO specialized in direct cash transfers to people living in poverty. They have been doing this for 10 years and are highly reputable. They're also efficient: of every $1 donated to GiveDirectly, $0.89 goes to recipients.

GiveDirectly is currently providing basic incomes in Kenya and Liberia. With more money, this can be expanded to more countries. Our ultimate goal is to provide a basic income for all 659 million people currently living in extreme poverty.

Of course, you can also directly donate money to GiveDirectly. With a monthly donation of just $35/month, GiveDirectly is able to lift one person above poverty, which is quite amazing.

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The innovation of Glo is that it allows you to financially contribute without actually giving any money away. 

This way we can scale up the fight against extreme poverty far beyond the amount of money people are willing to donate.

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The more money we collectively convert to Glo, the more basic income we generate, the more people we can lift out of extreme poverty.

Assuming a Glo reserve rate of 2.5%, every $17,000 added to the Total Amount of Glo lifts one more person out of extreme poverty.

Initially, there's not much you can do with your Glo. You can keep it, redeem it to get your normal US dollars back, or send it to someone else. That makes Glo perfect for your cash savings.

Over time, we strive to make Glo a useful currency in the real world such that you can pay your bills and buy goods and services with your Glo. At that point, theoretically you could convert all your money to ethical currency and even receive your salary as Glo.

If you're excited by this vision, consider joining the movement. Glo is not available yet, but you can already contribute in big and small ways. Let's end extreme poverty.

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Investing in T-bills is not a new idea—it's the standard business model for stablecoins.

The idea of having a cryptocurrency that's always worth $1 is not new either. It's called a stablecoin, and crypto traders have been using them for years.

Our for-profit competitors, like Tether and Circle (USDC) do the same thing: issue a stablecoin; keep a reserve; invest it in T-bills; earn money from the interest.

With Glo, there are two differences:

• We are non-profit. Rather than keeping the profits from the Glo reserve, we give all of it away.
• We're not just focused on crypto traders. We're aiming for mainstream adoption of Glo.

The crypto world currently has a need for about $150 billion of stablecoin. If Glo would replace 100% of that, the Glo reserve would contain $150 billion. Assuming a 2.5% Glo reserve rate, we'd be able to provide basic income to 9 million people.

To end extreme poverty, we need to grow much bigger. That's why our vision is for regular individuals to start using Glo as well—first just for savings, and then as everyday money in the real world. Our rough estimate is that replacing 7% of all money would generate enough money to end extreme poverty.

That's not to say we're not focused on crypto users. We aim to become the #1 stablecoin in the crypto world. In fact, we believe a non-profit issuer can make for a more trustworthy stablecoin. If you're currently using stablecoins, here's why you should consider switching to Glo.