Marshall Islands Introduces Universal Basic Income with Cryptocurrency Payment Options

Marshall Islands Rolls Out Universal Basic Income With Crypto Payment Option

The Marshall Islands has initiated a nationwide universal basic income (UBI) program that enables its citizens to receive payments using cryptocurrency.

Key Takeaways:

The Marshall Islands has launched a UBI program that offers both cryptocurrency and traditional payment methods.
The goal is to enhance financial inclusion without displacing jobs.
The majority of recipients still prefer bank transfers or checks over digital wallet options.

Under this initiative, every eligible resident receives quarterly payments of approximately $200, totaling around $800 annually. This effort aims to alleviate rising living costs and mitigate outward migration, as reported by The Guardian.

The first round of payments commenced in late November, with individuals able to choose how they want to receive their funds: through bank deposits, paper checks, or a government-backed digital wallet that utilizes blockchain technology.

UBI Program Focuses on Inclusion, Not Job Replacement

Finance Minister David Paul emphasized that the purpose of the scheme is to ensure broad financial inclusion, rather than to replace income from employment.

“We, the government, want to make sure nobody is left behind,” Paul told The Guardian. He added that the payments serve as a social safety net and a morale booster rather than a substitute for work.

Situated between Hawaii and Australia, the Marshall Islands is a Pacific nation with a population of about 42,000, facing distinct economic and geographical challenges. Many communities are dispersed across remote atolls, making it difficult to provide public services and financial assistance effectively. Authorities have stated that the inclusion of cryptocurrency is intended to tackle these logistical difficulties.

The program is financed through a trust established under a long-standing agreement with the United States, which also aims to compensate the Marshall Islands for decades of U.S. nuclear testing. Currently, the fund contains over $1.3 billion in assets, with Washington slated to contribute an additional $500 million through 2027.

Dr. Huy Pham, an associate professor and the crypto-fintech lead at RMIT University, has characterized this initiative as a landmark achievement globally.

“This is the world’s first national rollout of a UBI program,” he stated, highlighting that employing blockchain technology on a national scale is quite rare.

The crypto payments are made using a stablecoin pegged to the U.S. dollar, a choice intended to maintain price stability while enabling quick, traceable transactions across numerous islands.

However, the adoption of the digital payment option has been modest. According to the Marshall Islands Social Security Administration, around 60% of the initial payments were processed through bank deposits, with most of the remaining payments made by check. Only about a dozen individuals have chosen the digital wallet for their UBI thus far.

Exploring New Paths with Sam Altman’s Initiative

Sam Altman’s project, originally known as Worldcoin, is also working towards establishing a global UBI mechanism through its blockchain technology.

The central concept of the project involves verifying each person's unique human identity using biometric scans. The "Orb" device generates a World ID, indicating that a user is legitimate and not a bot, which facilitates equitable distribution of its native token, WLD.

Verified users receive WLD allocations, which some have interpreted as a form of UBI within the network, aimed at promoting global financial inclusion and economic participation.

Additionally, Worldcoin introduced World Chain, a layer-2 solution on the Ethereum blockchain, last year, providing services to its 15 million verified users with a “World ID” obtained through iris scanning.