Marshall Islands Launches Blockchain-Based Universal Basic Income: A Sovereign Crypto Experiment

The Marshall Islands just bypassed traditional finance entirely—launching the world's first sovereign digital currency to fund universal basic income for every citizen.

How a Pacific Nation Rewired Its Economy

Forget central banks and wire transfers. This microstate cut out the middlemen, issuing its national digital currency directly on a public blockchain. Every registered citizen gets a monthly allocation—no bank account required, just a digital wallet.

The Tech That Makes It Tick

The system runs on a transparent, immutable ledger. Smart contracts automate distribution, slashing administrative bloat. Transactions settle in minutes, not days—even to the remotest atoll. It's a real-time economic dashboard for an entire nation.

Why This Changes Everything

This isn't another crypto pilot. It's a sovereign monetary policy executed on-chain. It demonstrates how blockchain can deliver social policy with unprecedented efficiency and auditability. Other nations facing high remittance costs or unbanked populations are watching closely.

The Finance World's Ironic Twist

Here's the kicker: while Wall Street funds ponder tokenized ETFs, a tiny island nation just deployed a fully-functional digital currency ecosystem that actually serves its people—proving sometimes the biggest financial innovations come from places too small to bother with legacy bureaucracy.

The experiment is live. If it works, it could redefine not just basic income, but the very architecture of sovereign money.

The Republic of the Marshall Islands has launched the world's first nationwide universal basic income program distributed through blockchain technology, bypassing a correspondent banking system that has left Pacific island nations financially isolated.

The program, known locally as ENRA, began quarterly disbursements to eligible citizens in November using USDM1, a digitally issued sovereign bond built on the stellar network. The Stellar Development Foundation provided a multimillion-dollar grant to develop the infrastructure.

Citizens receive payments directly into Lomalo, a mobile wallet application built by Crossmint specifically for the Marshall Islands. The blockchain-based system replaces a cash delivery model where physical dollars arrived quarterly by shipping container, subject to purchase caps and withdrawal limits that frequently left ATMs empty between deliveries.

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We’re helping tokenize a nation.

The Marshall Islands is launching blockchain-based UBI, giving citizens dollar-denominated tokens they can receive, store, and send peer-to-peer from their phones.

Powered by Crossmint Wallets pic.twitter.com/lvAWjTI6SW

"Delivering the first blockchain-powered instance of nationwide Universal Basic Income is what the Stellar network was built to power," said Denelle Dixon, CEO of the Stellar Development Foundation. She described the program as demonstrating what adoption looks like when people can receive and spend money on-chain while accessing financial services unavailable through traditional banking.

The Marshall Islands government also released a WHITE paper outlining its financial inclusion strategy, digital infrastructure modernization plans, and policy framework for USDM1. The document frames the stablecoin program as addressing a coordination failure where individual bank decisions created collectively irrational outcomes, forcing small nations to bear costs of maintaining financial architecture designed for economies thousands of times larger.

According to the country's Ministry of Finance, the Marshall Islands faces acute financial access constraints stemming from the global retreat of correspondent banking. Pacific island countries have lost roughly 700 of their 1,200 correspondent banking relationships over the past decade as international banks withdrew from low-volume markets where compliance costs exceeded revenue potential.

The Marshall Islands now relies on a single correspondent banking partner. Citizens in outer atolls must take expensive inter-island flights to cash checks. Remittance fees across Pacific corridors average 10% – triple the UN sustainable development target – while international wire transfers can cost four to five times the global average and take up to a week to settle.

The Marshall Islands operates entirely on the U.S. dollar and maintains a unique partnership with the United States through the Compact of Free Association, most recently renewed in 2024 and extending through 2043. Its 1,200 islands spread across nearly 2 million square kilometers of ocean – an area comparable to Mexico – with roughly one-quarter of the population living in 24 atolls hundreds of miles from banking centers.

Physical cash scarcity has forced many households to hoard currency in anticipation of future shortages, while informal economies maintained through IOUs and barter emerged in areas without banking access. The Marshall Islands' fully dollarized economy lacks independent monetary tools available to countries with central banks, amplifying the impact of external price shocks.

Rodri Fernandez Touza, co-founder of Crossmint, said families in remote communities previously waited weeks for paper checks or cash shipments. The Lomalo wallet enables instant payment receipt, creating what he described as a blueprint for using stablecoins to modernize financial infrastructure regardless of location.