The Marshall Islands is launching a digital asset pilot for a basic income.
Date: 2025-12-22 Author: Gabriel Deangelo Categories: IN WORLD
The authorities of the Republic of the Marshall Islands have launched an experiment using cryptoassets to distribute a universal basic income. The initiative aims to assess the potential of digital solutions to replace cash and traditional banking services, which face persistent structural challenges in the country.
The pilot program began in November 2025 as part of the ENRA social initiative. Some citizens received payments not in their traditional currency, but in the form of USDM1 digital assets deposited through the government-owned Lomalo wallet. This mobile app, developed specifically for residents, operates on the Stellar blockchain, allowing transactions to be conducted without the involvement of traditional banks.
The project is being implemented with the technical and organizational support of Crossmint and the Stellar Development Foundation. According to the initiative's participants, the chosen model is scalable and could potentially reach up to 40,000 residents of the island nation. Payments are planned to be made on a regular basis—quarterly—to provide a stable additional income for households.
USDM1 differs from traditional stablecoins in its architecture. The developers emphasize that the asset is fully backed and is inherently closer to money market instruments. A key feature is that the income from the deposited funds goes directly to the asset owner, not the issuer. This, according to the Stellar Development Foundation, makes the model more transparent and beneficial for end users.
The choice of a digital payment format stems from the vulnerability of the Marshall Islands' financial infrastructure. Following the 2008 global crisis, a significant number of international banks curtailed operations in the region. As a result, the country became dependent on a limited number of correspondent banks, and access to financial services for the population became difficult. In many cases, citizens must travel long distances to cash checks or access their personal funds.
Despite the spread of internet access, thanks in part to the Starlink satellite system, the country's economy remains heavily dependent on the physical circulation of cash. Cash is delivered by sea, and ATM outages are common. Authorities note that these conditions increase systemic risks and make the economy vulnerable to external disruptions.
The Stellar Development Foundation notes that the Marshall Islands project builds on the organization's previous experience with digital humanitarian payments. Similar solutions have previously been implemented in collaboration with international organizations, including the United Nations Development Programme and UNHCR. The foundation believes that the use of blockchain can improve the accuracy and sustainability of social programs, especially in countries with limited access to banking services.
