Marshall Islands rolls out nationwide basic income using digital bonds

By Ron Rocky Coloma

When officials of the Marshall Islands began discussing universal basic income, the idea did not start in a policy lab or an academic pilot.

It started with geography. That physical reality shapes nearly every aspect of life, including how money moves and who has access to it.

“For the Marshall Islands, vulnerability isn’t just an abstract concept,” Finance Minister David Paul said. “By landmass, we’re among the world’s smallest countries, but by breadth, we cover an ocean area nearly the size of Mexico.”

That scale, Paul said, imposes what he described as a structural economic tax on citizens, particularly in a region where correspondent banking services have steadily withdrawn. For many Marshallese, receiving a check can mean waiting weeks, traveling by plane to deposit it, or standing in long lines for limited cash services.

Those conditions shaped the government’s decision to pursue a nationwide universal basic income program rather than a small trial.

“When we considered UBI, a small pilot simply wasn’t appropriate for our reality,” Paul said. “We needed to ensure that we could reach all of our citizens across all atolls, delivering consistent support for all communities on a regular basis.”

The result is ENRA, a universal basic income program delivered through quarterly disbursements, paired with an opt-in digital distribution option built on blockchain infrastructure. At the center of that system is USDM1, a U.S. dollar-denominated sovereign bond designed to modernize the distribution of public funds across the islands.

Moving from concept to nationwide implementation is where many UBI projects stall. In the Marshall Islands, Paul said, the country’s small population became an advantage rather than a constraint.

“When presented with urgent issues requiring national solutions, this enables faster decision making, especially when there is a close overlap between policy objectives, goals and lived realities,” he said.

Government officials saw firsthand how cash shortages and gaps in banking access affected families across the country, particularly in remote atolls far from the capital, Majuro, Paul said. That proximity to daily impacts helped align political will with institutional action.

“We acted by implementing the ENRA program for the benefit of all citizens,” he said.

Traditional banking methods, Paul said, have struggled to keep pace with the country’s geographic dispersion.

“The Marshall Islands’ sheer scale is one of our biggest national challenges,” he said. “Moving cash, or relying on inadequate correspondent banking infrastructure across many atolls, is slow, expensive and uneven.”

Those frictions are felt most acutely in the outer islands, where residents may have limited access to banks, postal services, or regular flights. Blockchain-based infrastructure offered a way to bypass many of those barriers.

“The benefits of blockchain infrastructure are clear,” he said. “It allows us to distribute fiscal disbursements, like quarterly ENRA distributions, instantly, securely and cheaply. Citizens can opt in to this distribution channel rather than waiting hours in line for checks, or weeks for checks in the mail that citizens often need to take a plane to deposit,” Paul said.

The digital network, he added, creates transparency across long distances and extends services to unbanked or underbanked citizens.

Introducing blockchain-based disbursements raised questions early on, particularly in communities unfamiliar with digital assets.

“Despite being new to some citizens, our education and engagement efforts led to a 100 percent uptake rate in an opt-in, controlled phase 1 pilot of USDM1 disbursement,” he said.

Interest has grown rapidly since then.

“We have already received interest exceeding 300 percent of our goals for phase II pilot disbursements,” he said, adding that additional education and outreach are underway.

The government expects UBI distributions to continue quarterly for the next 20 years. Over time, Paul said, usage is likely to expand as citizens become more familiar with the system.

“We expect usage to grow as its advantages become more understood, just as the technical form factor of stablecoins has growing adoption and has become widely understood,” he said.

Global attention has focused on USDM1 as a technological first. Paul said balancing that interest with the everyday expectations of Marshallese citizens requires a clear priority.

“The balance starts by putting Marshallese citizens first,” he said. “USDM1 was designed for Marshallese citizens and their needs, safely distributing disbursements across vast distances underserved by traditional rails.”

“This is not just some technology experiment,” Paul said. “It is a safe mechanism for sovereign bond disbursements and record keeping, with legal certainty for recipients.”

USDM1, he said, strengthens fiscal governance and inclusion while offering citizens a choice in how they receive public funds.

The Marshall Islands operates exclusively on the U.S. dollar under its Compact of Free Association with the United States, recently renewed for another 20 years. Paul said USDM1 complements that arrangement rather than competing with it.

“USDM1 is not a currency,” he said. “It is a U.S. dollar-denominated sovereign bond, backed 1:1 by U.S. Treasuries. Its structure mirrors Brady bonds, through which more than $150 billion of sovereign bonds have been issued over the past three decades,” Paul said.