How Marshall Islands Revolutionized Universal Basic Income Through Blockchain Technology

The Republic of the Marshall Islands has made history by executing the world’s first fully digital universal basic income distribution via the Stellar blockchain. This groundbreaking initiative, which unfolded in late December, marks a pivotal moment where blockchain technology meets sovereign fiscal policy. Working alongside the Stellar Development Foundation (SDF) and infrastructure provider Crossmint, the Marshall Islands Treasury successfully deployed USDM1—a digitally native sovereign bond—to deliver multi-million dollar payments to eligible citizens across the island nation.

How the Universal Basic Income Program Works

The ENRA program fundamentally transforms how the Marshall Islands disburses universal basic income to its residents. Rather than relying on quarterly cash distributions that are logistically challenging across scattered island communities, the government now leverages the Stellar blockchain to facilitate direct digital transfers. Citizens receive their universal basic income allocations through Lomalo, a customized digital wallet application designed specifically for this initiative. This on-chain approach eliminates intermediaries, reduces transaction costs, and ensures rapid settlement—advantages that traditional banking infrastructure cannot match in remote or fragmented geographies.

USDM1: The Sovereign Bond Powering Digital Distribution

The USDM1 sovereign bond serves as the cornerstone of this universal basic income system. Each USDM1 token represents a one-to-one claim on short-term U.S. Treasury securities, ensuring that the digital asset maintains full collateral backing. The Marshall Islands Treasury confirmed that USDM1 operates under New York law rather than regulatory discretion, providing legal certainty to all participants. An independent trustee maintains custody of the underlying U.S. Treasury bonds, guaranteeing segregated assets and unconditional redemption rights. This structure demonstrates how a nation can issue blockchain-based instruments while maintaining supreme legal protections and financial stability.

Safeguarding National Sovereignty and Fiscal Autonomy

A critical concern for any nation adopting digital currency systems is whether monetary and technological sovereignty remains intact. The Marshall Islands explicitly designed this universal basic income framework to preserve both dimensions of sovereignty. The white paper accompanying the program details how USDM1 operates as a fully backed asset instrument—not a central bank digital currency or unilateral monetary experiment. By anchoring the system to U.S. Treasury collateral and employing independent custody arrangements, the nation ensures that its universal basic income initiative remains fiscally sound while the Stellar blockchain provides the technological infrastructure. This approach could serve as a template for other jurisdictions exploring blockchain-based social programs.