Marshall Islands Pilot Crypto-Based Universal Income Program on Stellar

The Marshall Islands have begun testing a crypto-based universal income system, distributing payments to citizens through a yield-generating digital token built on the Stellar blockchain. The initiative marks one of the most ambitious government-led experiments using blockchain technology for public welfare.

Under the program, known as ENRA, roughly 40,000 residents receive payments in USDM1, a token issued on Stellar and distributed via Lomalo, a simplified digital wallet developed by Crossmint. The shift replaces traditional paper checks with onchain transfers, aiming to modernize aid delivery in a nation long affected by limited banking access.

Unlike conventional stablecoins, where interest generated from reserves typically flows to issuers, USDM1 passes yield directly to users. According to the Stellar Development Foundation, the token is backed by government bonds, with returns credited to citizens holding the asset.

“Unlike a stablecoin where the issuer captures the yield, this model ensures the asset holder benefits,” said Paul Wong, director at the Stellar Development Foundation. The design positions USDM1 as both a payment mechanism and a source of passive income for recipients.

The choice of Stellar reflects its focus on low-cost, fast transactions, particularly in regions with limited financial infrastructure. Lomalo’s wallet removes many technical hurdles associated with crypto, eliminating seed phrases and complex interfaces to make access easier for non-technical users.

The initiative is also a response to the Marshall Islands’ fragile banking system. Since the 2008 global financial crisis, the country has been left with just one international correspondent banking connection, leaving it vulnerable to sudden disconnection from global finance.

Officials view the crypto-based system as a contingency plan, ensuring financial continuity if traditional banking rails fail. Observers say the pilot could serve as a blueprint for other nations facing similar financial isolation.

Financial Inclusion and Social Impact

Beyond infrastructure, the program is designed to reshape how aid reaches households. Universal income is distributed directly to individual digital accounts, which supporters argue strengthens financial autonomy—particularly for women.

“When payments go directly to women, they are no longer absorbed into joint accounts where funds may be redirected.”

Stellar has previously partnered with international organizations, including the United Nations and the German government, to deploy blockchain-based aid systems in regions affected by conflict and instability, such as Ukraine and parts of the Middle East.

The Marshall Islands experiment reflects a broader shift in how governments view digital assets. Once seen primarily as speculative or risky, crypto is increasingly being explored as a tool for financial inclusion, resilience, and direct aid distribution.

While the long-term success of the USDM1 pilot remains uncertain, the initiative highlights how real-world use cases—rather than price speculation—may shape the future of blockchain adoption. For small, infrastructure-constrained nations, crypto may offer not just innovation, but necessity.