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Breadcoin: the new dough in Washington for those in need

They are another option for people who worry that giving money to those in need might be used to fuel an addiction

The coins aim to help the roughly 17 per cent of residents who are poor. Over 6,900 people in the city are homeless.


JEFFREY Carter, who is homeless, clutched two gold-coloured coins in his palm as he approached the Mission Muffins cafe trailer in Washington to exchange them for a breakfast burrito and apple juice.

The quarter-size coins - each worth US$2.20 - are "Breadcoins", a new form of currency in the District of Columbia for people in need.

Inspired by the recent popularity of cryptocurrencies, such as bitcoin, Breadcoins have circulated in the District since 2016, but are still relatively unknown. They are another option for people who worry that giving money to those in need might be used to fuel an addiction.

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Mr Carter got his Breadcoins at the Central Union Mission, where he has been living since August when he relocated from Connecticut. The shelter serves meals, but using Breadcoins at Mission Muffins gives him more options and allows him to feel like a paying customer. Mission Muffins, which is next to the shelter, is a workforce development programme in the NoMa neighborhood.

A major way Breadcoins are distributed is through Central Union Mission, which distributes the coins to residents who take their workforce development classes. Breadcoin's co-founder, Scott Borger, also often distributes the coins to people when he volunteers at the shelter each week.

The coins are the product of his entrepreneurial venture that encourages people to buy coins for US$2.50 each and distribute them to people who are hungry or to participating nonprofits. Each coin is redeemable for US$2.20 worth of food at one of six vendors in the District, with a combined 11 locations. The value difference keeps the non-profit organisation running.

Some items at Mission Muffins are priced so that they can be bought with one Breadcoin. For example, a Breadcoin will buy a muffin, a twin pack of scones or a cup of coffee. For items that cost more, people can either pay with multiple coins or make up the difference with cash.

The coins are aimed at helping the roughly 17 per cent of city residents who, according to census data, are experiencing poverty. More than 6,900 people in the city are homeless, according to the District's point-in-time count conducted in January 2018.

The economics of the initiative seem simple at first: People buy the coins online or at Mission Muffins and distribute them to people they encounter who ask for money. There's also an option to pay a monthly fee of US$25 for 10 coins. After recipients use the coins, the vendors redeem them for cash.

But the roughly 2,800 coins in circulation also double as a loan repayment mechanism for some vendors. In 2016, Breadcoin bought a US$20,000 trailer for Mission Muffins, which was then operating out of a tent.

The business is paying off the trailer in US$600 monthly installments using as many Breadcoins as possible and the rest with a cheque. Once Mission Muffins finishes repaying the loan in December, it will own the trailer outright and can start exchanging Breadcoins for cash.

In addition to making 30 US cents off each coin it sells, Breadcoin is also funded by donors and investors. The staff are all volunteers, which Mr Borger said keeps overhead costs low.

Not every vendor that accepts the coins takes a loan from Breadcoin, but Mr Borger said supporting local entrepreneurs is important.

Mr Borger, who is also an economist at the National Credit Union Administration, said the project gives him a different perspective on the city. "In a room with people who are talking about billion-dollar deals, it's good to be reminded on occasion that US$100 or even US$25 can be a huge difference in someone's budget," he said.

Convincing businesses to join the programme has not always been easy. Some restaurant owners fear that inviting in people who are homeless might alienate other customers, so Mr Borger said he's prioritising takeout businesses for now.

He hopes to eventually expand Breadcoin to other cities and rural areas, and to get the coins into schools to reach children. Mostly, he said he hopes the coins will empower people to acknowledge others who are in need, instead of averting their eyes. WP