Marshall Islands debuts on-chain UBI with USDM1 bond backed by U.S. Treasuries

The Republic of the Marshall Islands (RMI) has completed the world’s first on-chain disbursement of universal basic income (UBI) using a digitally native sovereign bond, USDM1, via the Stellar blockchain.

Developed in partnership with the Stellar Development Foundation (SDF) and infrastructure provider Crossmint, the multimillion-dollar initiative is part of RMI’s national UBI program, known locally as ENRA, the Marshalls Islands’ Finance Ministry confirmed. The program replaces quarterly physical cash deliveries with direct digital transfers to eligible citizens, many of whom live across widely dispersed islands.

USDM1 is a U.S. dollar-denominated sovereign bond fully backed by short-term U.S. Treasury bills. The bond is distributed through the Stellar Disbursement Platform into a custom-built digital wallet app called Lomalo. Developed by Crossmint, Lomalo allows recipients to receive funds instantly via Crossmint wallets on the Stellar network.

In an exclusive statement to CoinDesk, a Finance Ministry spokesperson said, “USDM1 is issued under New York law using a time-tested Brady-bond structure that has underpinned sovereign finance for decades. Its foundation is not regulatory discretion or policy preference, but settled law.”

“U.S. Treasury collateral is held by an independent trustee, outside the control of any government or private issuer, and redemption rights are fixed, unconditional, and legally enforceable,” the spokesperson added.

SDF CEO Denelle Dixon said the program exemplifies “what adoption looks like for blockchain technology,” enabling everyday financial access where it was previously lacking.

The government emphasized that USDM1 does not compromise the country’s monetary or technological sovereignty. “ENRA is a fiscal distribution program, not a currency initiative,” the spokesperson said. “Every unit is issued one-to-one against short-dated U.S. Treasuries held in trust, fully backed and legally segregated at all times.”

The rollout, years in the making, was shaped by the Marshall Islands’ geography and infrastructure constraints. “Distance, dispersion, and limited physical infrastructure shape the realities of daily life,” the spokesperson said. “This was purpose built for the Marshall Islands.”

A white paper released alongside the initiative outlines the broader policy and financial framework for USDM1.