Marshall Islands Test Crypto for Universal Basic Income as Cash and Banks Fall Short
The Republic of the Marshall Islands (RMI) is adopting digital assets to modernize access to financial services. Citizens now receive universal basic income (UBI) either as paper checks or as USDM1, a token deposited in Lomalo, a blockchain-based digital wallet developed by Crossmint on the Stellar network. USDM1 is structured as a fully collateralized sovereign bond, providing yield directly to holders, unlike traditional stablecoins. Disbursements occur quarterly and aim to digitize the economy in a nation with limited banking infrastructure and heavy dependence on physical cash, especially after foreign banks withdrew post-2008 crisis. Lomalo is designed for ease of use, omitting complex crypto security features. The initiative is partly funded by Stellar Development Fund (SDF), which supports similar financial inclusion projects globally. Enhanced internet access via Starlink supports this digital rollout, while USDM1 offers a practical alternative if RMI loses its last correspondent bank connection. Direct digital UBI payments can also shift social dynamics by empowering individual recipients, including marginalized groups.
