The Republic of the Marshall Islands (RMI) has completed the world’s first universal basic income (UBI) on-chain payment using digitally native government bonds USDM1 via the Stellar blockchain.
The multi-million dollar initiative, developed in partnership with Stellar Development Foundation (SDF) and infrastructure provider Crossmint, is part of RMI's national UBI program, known locally as ENRA, confirmed by the Marshall Islands Ministry of Finance. The program replaces quarterly physical cash deliveries with direct digital transfers to eligible citizens. Most of the population lives on widely dispersed islands.
USDM1 is a U.S. dollar-denominated sovereign debt instrument fully backed by short-term U.S. Treasury bills. The bonds will be distributed through the Stellar Disbursement Platform to a custom-built digital wallet app called Lomalo. Developed by Crossmint, Lomalo allows recipients to instantly receive funds via their Crossmint wallet on the Stellar network.
In an exclusive statement to CoinDesk, a Treasury Department spokesperson said, “USDM1 will be issued under New York law using the proven Brady bond structure that has supported sovereign finance for decades. Its foundation is established law, not regulatory discretion or policy preferences.”
The spokesperson added that “U.S. Treasury collateral is held by an independent trustee outside the control of the government or private issuer, and the right of redemption is fixed, unconditional, and legally enforceable.”
SDF CEO Denel Dixon said the program exemplifies “what the implementation of blockchain technology can look like” and will enable everyday financial access that has been lacking until now.
The government emphasized that USDM1 does not infringe on a country's monetary or technological sovereignty. “ENRA is a fiscal distribution program, not a monetary initiative,” the spokesperson said. “All units are issued 1:1 against U.S. Treasury bills in trust, are fully backed, and are always legally segregated.”
This development took place over many years and was shaped by the geography and infrastructure constraints of the Marshall Islands. “Distance, dispersion and limited physical infrastructure shape the reality of everyday life,” the spokesperson said. “This is made for the Marshall Islands.”
A white paper released alongside this effort outlines USDM1's broader policy and financial framework.
