Marshall Islands Becomes First To Launch On-Chain UBI

17th December 2025 – The Republic of the Marshall Islands has become the first country in the world to distribute universal basic income (UBI) entirely on-chain. The government used a blockchain-based sovereign bond, USDM1, to make digital payouts to citizens across remote islands.

The landmark rollout took place in December 2025. It replaced traditional cash delivery systems with instant digital transfers using the Stellar blockchain.

Marshall Islands UBI: A Digital Milestone for Public Finance

The UBI program, known locally as ENRA, is designed to address the country’s unique geography. The Marshall Islands spans 24 atolls scattered across the Pacific, where banking infrastructure is limited and cash deliveries are slow and costly.

With ENRA, eligible citizens now receive UBI payments directly into a custom wallet app called Lomalo. This app, developed with infrastructure partner Crossmint, integrates with Stellar’s Disbursement Platform to deliver digital assets backed by U.S. Treasuries.

The new system replaces quarterly physical cash shipments with fast, traceable, and secure disbursements.

USDM1: A Treasury-Backed Blockchain Bond

At the core of the program is USDM1, a fully collateralized, U.S. dollar-denominated digital sovereign bond. It is backed one-to-one by short-term U.S. Treasury bills held in legal trust. The structure mirrors Brady bonds, long used by emerging markets, but modernized for blockchain settlement.

According to the Finance Ministry, USDM1 preserves the nation’s sovereignty. It does not function as a new currency, but rather as a secure fiscal instrument used to deliver benefits. A New York legal framework underpins the instrument, ensuring enforceability and transparency.

Redemption rights remain fixed and unconditional. An independent trustee safeguards the collateral, keeping it separate from both the government and the private issuer.

Reaching the Unbanked

Finance Minister David Paul stated that the digital initiative was not designed to replace existing systems entirely. Instead, it complements physical channels while bringing more Marshallese into the digital economy.

So far, over 33,000 residents have registered for the program, marking the largest outreach campaign in the nation’s history. The first round of payments began in late November.

Paul added that by tokenizing sovereign debt and delivering it as UBI, the country can lower costs, increase efficiency, and improve transparency in public distribution.

A New Use Case for Blockchain in the Pacific

The program was launched in collaboration with the Stellar Development Foundation (SDF). SDF’s CEO, Denelle Dixon, described it as a model for blockchain adoption in regions where financial access is limited.

“ENRA shows how blockchain can solve real problems, not just in theory, but on the ground,” she said. Dixon emphasized that in remote areas like the Marshall Islands, efficient digital rails are not a luxury but a necessity.

This marks a significant shift for the country. In 2018, the Marshall Islands proposed a national cryptocurrency called SOV. That project eventually stalled, but the current approach reflects a more measured path toward tokenized finance. It favors stable, Treasury-backed assets over native cryptos.

According to Stellar data, the platform now hosts over $1 billion in tokenized U.S. Treasury assets, more than any other blockchain, including Ethereum.

Broader Implications

The successful launch of USDM1 and ENRA could inspire other governments to consider blockchain for social welfare and debt issuance. It shows how sovereign-backed instruments can live on-chain while remaining compliant and trustworthy.

With this move, the Marshall Islands positions itself as a pioneer in public sector blockchain innovation, one focused not on speculation, but on impact.