The Republic of the Marshall Islands has made history by executing the world’s first on-chain disbursement of universal basic income (UBI) through the use of a digitally native sovereign bond, USDM1, which operates on the Stellar blockchain. This innovative initiative was developed in collaboration with the Stellar Development Foundation (SDF) and the infrastructure provider Crossmint. The program, referred to locally as ENRA, is a groundbreaking effort in the RMI’s national UBI initiative, as confirmed by the Finance Ministry.
In a significant shift, the program replaces traditional quarterly physical cash deliveries with direct digital transfers to eligible citizens, many of whom reside across the Marshall Islands’ geographically dispersed islands. The USDM1 bond is pegged to the U.S. dollar and fully backed by short-term U.S. Treasury bills. The disbursement of funds occurs through the Stellar Disbursement Platform, with recipients able to access their funds via a custom-built digital wallet app called Lomalo, created by Crossmint. This app facilitates instant financial transactions using Crossmint wallets on the Stellar network.
A spokesperson from the Finance Ministry explained the legal framework supporting USDM1, stating, “USDM1 is issued under New York law using a time-tested Brady-bond structure that has underpinned sovereign finance for decades. Its foundation is established by settled law, not regulatory discretion or policy preference.” Further emphasizing the security of this initiative, the spokesperson noted that U.S. Treasury collateral is held by an independent trustee, ensuring that redemption rights are fixed, unconditional, and legally enforceable.
Denelle Dixon, CEO of SDF, praised the initiative as an example of “what adoption looks like for blockchain technology,” highlighting the program’s role in providing widespread financial access where it was previously absent. The government has clarified that USDM1 does not threaten the nation’s monetary or technological sovereignty. “ENRA is a fiscal distribution program, not a currency initiative,” stated the spokesperson, reinforcing the bond’s backing, which consists of U.S. Treasuries held in trust and fully segregated at all times.
The rollout of this program reflects the unique challenges posed by the Marshall Islands’ geography and infrastructure limitations. “Distance, dispersion, and limited physical infrastructure shape the realities of daily life,” explained the Finance Ministry representative. The program has been meticulously designed to cater specifically to the needs and realities of the Marshall Islands’ citizens.
Accompanying the launch, a white paper has been released that outlines the policy and financial framework associated with USDM1, marking a pivotal step in the integration of digital finance within national governance.
