Marshall Islands Launches On-Chain Universal Basic Income Program

The Republic of the Marshall Islands (RMI) has initiated a significant financial undertaking with the launch of the nation's first on-chain Universal Basic Income (UBI) program, locally termed Economic Net Resource Allocation (ENRA). This system began quarterly digital disbursements in November 2025, replacing the former method of slow, expensive physical cash deliveries with immediate transfers executed on the Stellar blockchain.

The program's structure is anchored by USDM1, a sovereign digital bond fully collateralized by short-term U.S. Treasury bills held within an independent trust. This instrument is structured in alignment with the established Brady bond framework and is governed by New York commercial law. The logistical complexity of the RMI, an archipelago spanning an area comparable to Mexico with 1,200 islands, rendered traditional fund distribution inefficient and subject to delays. Previously, government payments relied on physical currency transported by official vessels, a process frequently hampered by purchase caps and withdrawal limits that led to ATM shortages between payment cycles.

The ENRA program provides eligible citizens with approximately $200 per quarter, totaling about $800 annually, directly addressing this systemic unreliability and financial exclusion. This rollout serves as a key demonstration of blockchain utility for sovereign finance and national-scale public welfare distribution. Key institutional support included a multimillion-dollar grant from the Stellar Development Foundation (SDF) to aid in the development and deployment of the USDM1 instrument and its underlying technology. Furthermore, Crossmint engineered Lomalo, a custom digital citizen wallet designed for accessibility, notably by abstracting complex cryptographic elements like seed phrases for the general user base.

While the Stellar Disbursement Platform enables near-instant settlement, recipients maintain the option to receive entitlements through conventional channels, such as paper checks or direct bank deposits. Initial data from the first round indicated that approximately 60% of recipients selected bank transfers over the on-chain wallet. This technological shift is also positioned as a strategic measure to bolster financial resilience. Paul Wong, Director of Special Projects at SDF, noted that the digital instrument provides a crucial contingency should the nation lose its correspondent banking relationship, which would otherwise disconnect it from the global financial system.

The Marshall Islands operates under the Compact of Free Association with the United States, reaffirmed in 2024 and effective until 2043, with the Compact Trust Fund budgeted to provide the primary financing for the ENRA program, estimated at $27 million for its inaugural year. The USDM1 structure is designed to maintain U.S. dollar sovereignty without introducing a new currency, functioning as a dual-recourse instrument anchored in established legal frameworks. The collateral, short-dated U.S. Treasuries, is held by an independent trustee, ensuring a one-to-one backing that prevents the collateral from being used for budget support. The International Monetary Fund acknowledged the program's goal of strengthening social protection but cautioned that the initiative, costing approximately 8.1 percent of the microstate's GDP, could potentially displace other essential expenditures.