The Republic of the Marshall Islands (RMI) completed the world’s first on-chain payment for Universal Basic Income (UBI) using the digitally native sovereign bond USDM1 via the Stellar blockchain.
The Marshall Islands Department of Finance confirmed that the multi-million dollar program was developed in partnership with the Stellar Development Foundation (SDF) and infrastructure provider Crossmint as part of the RMI National UBI Initiative, known locally as ENRA. The program replaces quarterly physical cash deliveries with direct digital transfers to eligible citizens, many of whom live on scattered islands.
USDM1 is a U.S. dollar-denominated sovereign bond backed entirely by short-term U.S. Treasury bills. The bond is distributed through the Stellar Payments platform into a custom digital wallet application called Lomalo. Developed by Crossmint, Lomalo allows recipients to receive funds instantly through the Crossmint wallet on the Stellar network.
In an exclusive statement to CoinDesk, a Treasury spokesperson said, “USDM1 was issued under New York law, using the time-tested Brady bond structure that has underpinned sovereign finance for decades. It is based not on regulatory discretion or policy preference, but on established law.”
The spokesman added: “U.S. Treasury collateral is held by an independent trustee and is not subject to the control of any government or private issuer, and redemption rights are fixed, unconditional and legally enforceable.”
Denelle Dixon, CEO of SDF, said the initiative exemplified the “adoption of blockchain technology” enabling everyday financial services that were previously lacking.
The government stressed that USDM1 would not undermine the country’s monetary or technological sovereignty. “ENRA is a fiscal allocation plan, not a monetary plan,” the spokesman said. “Each unit is issued one-to-one with short-term U.S. Treasury securities held in trust and is fully backed and legally segregated at all times.”
The project’s rollout took several years due to geographical and infrastructure constraints in the Marshall Islands. “Distance, dispersion and limited physical infrastructure shape the reality of daily life,” the spokesperson said. “This is purpose-built for the Marshall Islands.”
A white paper released alongside the initiative outlines USDM1’s broader policy and financial framework.