Marshall Islands UBI sets new benchmark for digital public finance on Stellar

Years of experimentation with digital public finance have culminated in the launch of the Marshall Islands UBI, blending blockchain infrastructure with traditional sovereign debt structures.

Marshall Islands completes first on-chain UBI disbursement

The Republic of the Marshall Islands has executed the world’s first on-chain disbursement of universal basic income (UBI) using a digitally native sovereign bond, USDM1, on the Stellar blockchain. The operation, confirmed by the Marshalls Islands Finance Ministry, marks a multimillion-dollar milestone in state-backed blockchain deployment.

The initiative sits at the core of the country’s national UBI program, known locally as ENRA. Moreover, it replaces quarterly physical cash deliveries, which were often slow and logistically complex, with direct digital transfers to eligible citizens across widely dispersed islands.

According to the ministry, this new model seeks to improve reliability and transparency in social transfers while reducing the high costs of distributing cash across remote atolls. However, the government also stressed that the project is designed specifically around the realities of Marshallese geography.

USDM1 structure and backing with U.S. Treasuries

USDM1 is a U.S. dollar-denominated sovereign bond fully backed by short-term U.S. Treasury bills. Every unit is issued one-to-one against short-dated Treasuries held in trust. As a result, the bond is intended to preserve capital and offer predictable redemption terms for the state and citizens.

The instrument is distributed through the Stellar Disbursement Platform into a custom-built app called Lomalo. That said, while the asset uses blockchain rails, its risk profile is rooted in conventional sovereign finance rather than in volatile crypto markets.

A Finance Ministry spokesperson told CoinDesk that USDM1 is issued under New York law using a time-tested Brady-bond structure that has supported emerging market sovereign finance for decades. Moreover, officials emphasized that the bond’s legal architecture is grounded in settled law rather than experimental regulation.

The spokesperson added that U.S. Treasury collateral is held by an independent trustee, outside the control of any government or private issuer. Redemption rights are fixed, unconditional, and legally enforceable, reinforcing the product’s credentials as a traditional financial instrument deployed through modern rails.

Digital delivery through Lomalo wallet and Crossmint infrastructure

The Lomalo digital wallet, developed by infrastructure provider Crossmint, is central to how citizens actually access their UBI payments. Through Lomalo, recipients can receive funds instantly into Crossmint wallets running on the Stellar network, which in turn enables on-chain transfers and balance checks.

This architecture reflects a hybrid design. On one side stand conventional sovereign bonds and U.S. Treasury collateral; on the other sits blockchain-based distribution via the Stellar ecosystem and the crossmint stellar wallet stack. However, the government has framed the wallet primarily as a delivery and access tool rather than as a speculative interface.

Strategy around user experience has focused on simplicity, given connectivity constraints and varying levels of digital literacy across the islands. Moreover, the ENRA UBI program includes education and support components to help citizens transition from cash-based payouts to app-based transfers.

Policy design and sovereign control

Authorities are keen to underline that the marshall islands ubi does not alter the country’s monetary or technological sovereignty. The Finance Ministry described ENRA as a fiscal distribution program, not a new currency initiative, even though it leverages blockchain infrastructure and tokenized bond units.

According to the spokesperson, every unit of USDM1 remains fully backed and legally segregated at all times in U.S. Treasuries. Moreover, the independent trustee structure ensures that neither the Marshallese government nor any private issuer can unilaterally change collateral arrangements.

SDF CEO Denelle Dixon said the rollout demonstrates “what adoption looks like for blockchain technology,” particularly when it addresses practical needs such as social transfers and everyday financial access. However, Dixon also noted that geographic and infrastructural constraints in the Pacific region make such solutions more than just a technology upgrade.

Geographical realities and long-term vision

The program’s architecture has been shaped by the Marshall Islands’ geography and infrastructure since its early design phase. Many citizens live on remote atolls scattered across a vast area of the Pacific, complicating traditional cash delivery and banking models.

“Distance, dispersion, and limited physical infrastructure shape the realities of daily life,” the spokesperson said, underscoring why the initiative was purpose-built for the Marshall Islands. Moreover, the government expects digital transfers to reduce logistical bottlenecks and improve payout reliability over time.

A white paper released alongside the launch details the broader policy, legal, and financial framework behind the USDM1 sovereign bond and the ENRA program. It also situates the Marshall Islands experiment within a wider conversation about digital public finance and targeted welfare in underserved regions.

In summary, the Marshall Islands’ use of a blockchain-native, U.S. Treasury-backed bond to deliver universal basic income demonstrates how sovereign debt, legal rigor, and distributed ledger technology can interact to modernize state welfare without sacrificing control or stability.