Marshall Islands Launches World's First National On-Chain Universal Basic Income Program via Stellar

The Republic of the Marshall Islands has successfully completed the first disbursement of its nationwide Universal Basic Income (UBI) program, powered by the Stellar blockchain. This initiative marks the world's first national rollout of a UBI program utilizing blockchain technology.

The program provides every resident citizen with quarterly payments of approximately $200, totaling about $800 annually. The funds are distributed through a government-issued digital wallet app called Lomalo, developed by infrastructure provider Crossmint, which delivers payments via a US dollar-pegged stablecoin on the Stellar network. Citizens also retain the option to receive funds via traditional bank deposits or paper checks.

The UBI is funded by a trust established under an agreement with the United States, holding over $1.3 billion in assets. This trust is partly aimed at compensating the Marshall Islands for decades of US nuclear testing, with Washington committed to contributing an additional $500 million through 2027.

The stablecoin used, USDM1, is a digitally native sovereign bond structured under New York law. It is fully backed one-to-one by short-term U.S. Treasury Bills held in trust. Finance Minister David Paul emphasized that the program is a "fiscal distribution program, not a currency initiative" and is in line with recognized international financial practices.

The initiative was developed in partnership with the Stellar Development Foundation (SDF) and Crossmint to overcome the nation's significant geographical challenges, including remote atolls and limited physical infrastructure. SDF CEO Denelle Dixon praised the project, stating, "This is exactly what blockchain technology adoption should look like."

Despite its innovative nature, uptake of the digital wallet option has been limited initially, with only around a dozen people opting for it in the first disbursement in late November. The majority of payments were made via bank deposits and checks. The International Monetary Fund (IMF) had previously cautioned that the USDM1 medium "could carry risk that may not justify the anticipated return," a concern addressed by Minister Paul who affirmed the program's backing by tangible assets.