The Republic of the Marshall Islands (RMI) has successfully completed the world’s first on-chain distribution of universal basic income (UBI) using a digitally native sovereign bond, USDM1, on the Stellar blockchain.
In collaboration with the Stellar Development Foundation (SDF) and infrastructure provider Crossmint, the RMI’s national UBI program, known as ENRA, has implemented a multimillion-dollar initiative to replace physical cash deliveries with direct digital transfers to eligible citizens living across various islands.
USDM1 is a U.S. dollar-denominated sovereign bond backed by short-term U.S. Treasury bills and distributed through the Stellar Disbursement Platform to a custom digital wallet app called Lomalo. Developed by Crossmint, Lomalo enables recipients to instantly receive funds via Crossmint wallets on the Stellar network.
According to a spokesperson from the Marshall Islands’ Finance Ministry, “USDM1 is issued under New York law using a well-established Brady-bond structure, ensuring its legitimacy in sovereign finance. The bond’s collateral is held by an independent trustee, with fixed and legally enforceable redemption rights.”
SDF CEO Denelle Dixon commended the program as a significant step towards blockchain technology adoption, providing financial access to individuals where it was previously lacking.
The government clarified that USDM1 does not compromise the country’s monetary or technological autonomy, emphasizing that it is a fiscal distribution program rather than a currency initiative. Each unit is backed one-to-one by U.S. Treasuries held in trust.
The implementation of the program was tailored to address the unique challenges posed by the Marshall Islands’ geography and infrastructure limitations. “Distance, dispersion, and limited physical infrastructure have guided the development of this initiative, making it specially designed for the Marshall Islands,” the spokesperson explained.
A white paper accompanying the initiative details the broader policy and financial framework for USDM1.
