In a groundbreaking move blending social welfare with blockchain technology, the Republic of the Marshall Islands (RMI) has launched the world's first nationwide universal basic income (UBI) scheme that incorporates a cryptocurrency payment option.
Announced in late November 2025 and with first disbursements completed by mid-December, the program - locally known as ENRA (Economic Net Resource Allocation) - provides every resident citizen with $200 quarterly (approximately $800 annually), regardless of employment status.
Recipients can choose traditional methods - bank deposits or checks - or receive funds via a government-backed digital wallet using USDM1, a U.S. dollar-pegged stablecoin (technically a tokenized sovereign bond backed by short-term U.S. Treasuries).
Built on the Stellar blockchain in partnership with the Stellar Development Foundation and infrastructure provider Crossmint, the system aims to deliver instant, low-cost payments to remote atolls, bypassing logistical hurdles of physical cash shipments.
Addressing Geographic and Economic Challenges
The Marshall Islands, an archipelago of over 1,200 islands spread across vast ocean distances with a population of about 42,000, faces severe financial inclusion barriers. Traditional banking is limited, with the nation relying on a single correspondent banking partner after losing hundreds of relationships in recent years due to de-risking by global banks.
The blockchain option, delivered through the user-friendly Lomalo wallet, enables peer-to-peer transfers and overcomes delays in cash or check delivery that could take weeks. Finance Minister David Paul emphasized the program's goal: "We want to make sure no one is left behind," describing the payments as a "social safety net and morale booster" amid rising living costs and outward migration, rather than a replacement for work.
Funding and Historical Context
The initiative is financed through a trust fund established under the Compact of Free Association with the United States, which includes compensation for the devastating impacts of U.S. nuclear testing conducted between 1946 and 1958 on atolls like Bikini and Enewetak. The fund currently holds over $1.3 billion in assets, with an additional $500 million pledged by Washington through 2027.
This isn't RMI's first crypto experiment: In 2018, plans for a national cryptocurrency called the Sovereign (SOV) were abandoned after IMF warnings about risks.
Early Adoption and Expert Views
While hailed as innovative, uptake of the digital option has been modest. In the first round, about 60% chose bank deposits, most of the rest checks, and only around a dozen opted for the Lomalo wallet - reflecting patchy internet connectivity and familiarity with traditional methods.
Experts like Dr. Huy Pham from RMIT University call it "the world’s first national rollout of a UBI program" with blockchain, unique for nationwide implementation. However, the IMF has cautioned about potential financial integrity risks if oversight is inadequate.
Echoes of Crypto History
The concept of distributing digital assets to citizens recalls Auroracoin in Iceland. In 2014, this private project airdropped cryptocurrency to all residents via national ID to bypass capital controls post-financial crisis - popularizing the term "airdrop." Though it generated initial hype, Auroracoin quickly faded due to sell-offs and lack of sustained adoption.
In contrast, RMI's program is government-led, backed by sovereign assets, and integrated into national welfare - potentially setting a precedent for other small nations facing banking isolation.
As Pacific islands grapple with climate change, economic vulnerability, and de-banking, the Marshall Islands' experiment could blueprint how blockchain enhances financial resilience. Whether it drives widespread crypto adoption remains to be seen, but it undeniably marks a historic fusion of UBI and digital finance.
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
This is not financial or investment advice. Always do your own research (DYOR).
