Marshall Islands Makes History: Launches World’s First On-Chain UBI Using USDM1 Sovereign Bond
The Marshall Islands just bypassed the entire legacy financial system to put money directly into citizens' pockets. No banks, no middlemen, no delays—just programmable sovereignty on a blockchain.
The Sovereign Bond as a Digital Tool
Forget dusty treasury desks and quarterly coupon payments. The nation's USDM1 bond issuance wasn't just for raising capital; it became the foundational asset for a real-time, transparent Universal Basic Income (UBI) scheme. Every transaction, every distribution, lives immutably on-chain for anyone to verify.
Why This Cuts Through the Noise
This isn't a theoretical whitepaper or a corporate pilot. It's a sovereign nation deploying a national monetary policy instrument with the precision of a smart contract. It demonstrates how blockchain technology can be used for public good at a state level, turning sovereign debt into a direct economic stimulus mechanism.
The move effectively makes traditional welfare distribution—with its layers of bureaucratic overhead and eligibility paperwork—look like a relic. It's a provocative blueprint for other nations, proving that financial infrastructure can be rebuilt from the ground up to be more inclusive and efficient.
Of course, the old-guard financiers will scoff, muttering about volatility and 'unproven' tech—right before they quietly open a crypto research division to figure out how they missed the boat. Again.
Marshall Islands deploy blockchain to streamline UBI payments
The Marshall Islands Finance Ministry verified the operation, which represents a multimillion-dollar milestone in the deployment of state-backed blockchain technology.
The ministry claimed that this new model aims to lower the high expenses of transferring money among distant atolls while increasing the dependability and transparency of social transfers. The administration did emphasize, though, that the project is specifically tailored to Marshallese geography.
According to the ministry, a key component of the system is USDM1, a digitally recorded government security denominated in U.S. dollars and completely backed by short-dated U.S. Treasury notes. The structure enables the processing of electronic disbursements within the current U.S. dollar financial system. According to the government, digitizing issuance and settlement provides a means of reaching people in the country’s 24 scattered atolls, where access to banking services has traditionally been restricted.
The ministry report noted that the Stellar Disbursement Platform distributes the instrument into a specially designed app named Lomalo. According to the government, Lomalo will enable electronic access to benefit payments, eliminating the need for local banking infrastructure and reducing delays previously observed in transfers to outer islands.
Finance Minister David Paul stated that the program’s objectives are to increase access to government services and standardize the distribution of income support across the nation’s geographically scattered communities. He pointed out that the introduction of a digital option is intended to complement current payment methods rather than to replace them.
According to the ministry report, over 33,000 residents have signed up for a nationwide registration campaign, which is the biggest coordinated outreach initiative carried out throughout the nation’s atolls. The report revealed that the first UBI payment was expected to be made to all eligible recipients in late November.
USDM1 structure reinforces legal backing and sovereign control
A Finance Ministry representative stated that USDM1 is issued in accordance with New York law, using a tried-and-true Brady-bond structure that has helped emerging country governments finance their operations for many years.
The ministry representative further stated that neither the government nor the private issuer controls U.S. Treasury collateral, which is held by an independent trustee. The product’s credentials as a conventional financial instrument, implemented through contemporary railroads, are strengthened by its fixed, unconditional, and legally enforceable redemption rights.
“The program exemplifies what adoption looks like for blockchain technology, enabling everyday financial access where it was previously lacking.”
-Denelle Dixon, CEO and Executive Director of the SDF.
Dixon added that the Pacific region’s infrastructure and physical limitations make such solutions more than merely a technological advancement.
The ministry stressed that USDM1 does not jeopardize the nation’s technological or monetary sovereignty. According to the ministry spokesperson, ENRA is a fiscal distribution program rather than a currency project. The spokesperson added that every unit is issued one-to-one against short-dated U.S. Treasuries held in trust, fully backed, and legally segregated at all times.
A WHITE paper published concurrently with the launch details the larger regulatory, legal, and financial framework underlying the USDM1 sovereign bond and the ENRA program. Additionally, the economic framework for USDM1 places the Marshall Islands experiment within a broader discussion on targeted assistance in underdeveloped areas and digital public finance.
Get $50 free to trade crypto when you sign up to Bybit now
