**Marshall Islands UBI Experiment Based on Stellar Blockchain Enters a New Phase**

The Pacific island nation of the Marshall Islands (RMI) is advancing an innovative initiative utilizing blockchain technology. The country's Ministry of Finance has launched an on-chain distribution system for Universal Basic Income (UBI) using USDM1, a digital sovereign bond denominated in US dollars. This implementation was achieved through collaboration with international blockchain development agencies and infrastructure providers.

**An Attempt to Revamp Local Financial Distribution**

Traditionally, benefits were distributed in cash quarterly, but this has been transitioned to digital remittances. The measure aims to enable faster and more efficient fund transfers to eligible citizens living across multiple islands. This could significantly advance financial inclusion in the Pacific region, where physical distance has been a major barrier.

**Structure of Digital Bonds and Legal Framework**

USDM1 is a sovereign bond fully backed by short-term US Treasury securities and issued under New York law. The Stellar blockchain is used as the distribution platform, and citizens access this asset via a dedicated digital wallet application called "Lomalo." The collateral US Treasury securities are securely held by an independent trustee, and the redemption rights are designed to be fixed and legally enforceable.

**Sovereignty and Considerations for Monetary Policy**

The government of the Marshall Islands explicitly states that this UBI system does not compromise the country's monetary sovereignty or technological independence. In the ENRA fiscal distribution plan, each distribution unit corresponds 1:1 with short-term US Treasury trust securities, maintaining full backing throughout the process and ensuring a legally segregated structure. The white paper published by the country details a broader policy framework and financial strategy, emphasizing transparency in its design.