Marshall Islands' Innovative Bitcoin UBI Test Highlights Stablecoin Wallet

The Marshall Islands is testing a universal basic income (UBI) program that integrates cryptocurrency payments, focusing on reaching its remote communities.

Key Takeaways

The Marshall Islands has launched a nationwide UBI program providing citizens with $800 annually, with payments available in cryptocurrency.
Each eligible citizen receives approximately $200 quarterly, aimed at mitigating rising living costs and reducing migration.
Payments can be received via bank deposits, checks, or through a digital wallet for blockchain transactions.
The initiative is funded by a trust linked to U.S. compensation for nuclear testing in the area.
A stablecoin pegged to the U.S. dollar is used for payments to ensure price stability and efficient transfers.
Adoption of the digital wallet option remains low, with a majority preferring traditional payment methods.

Marshall Islands tests UBI with blockchain stablecoin wallet

Overview of the UBI Program

The Marshall Islands has initiated a nationwide universal basic income (UBI) program, allowing its citizens the opportunity to receive their payments through cryptocurrency, according to The Guardian. Under this program, every resident citizen is eligible for quarterly payments totaling around $800 annually—an effort to assist with rising living costs and curb outward migration.

The first distribution of payments occurred in late November, offering recipients choices of receiving their funds via customary bank deposits, paper checks, or a government-supported digital wallet that facilitates blockchain transactions.

Finance Minister David Paul explained to The Guardian that this initiative aims for broad inclusion and is not intended to replace traditional employment income. Rather, these payments serve as a social safety net and a source of morale for residents, rather than a substitute for wages.

Addressing Economic Challenges

Situated in the Pacific Ocean between Hawaii and Australia, the Marshall Islands is home to about 42,000 people and faces unique economic and geographic challenges. Many of its communities reside on remote atolls, making it difficult to provide public services and financial assistance. Officials introduced the cryptocurrency payment option to help address these logistical obstacles.

Funding for the program comes from a trust established under an agreement with the United States, designed partly to compensate the Marshall Islands for years of U.S. nuclear testing. This trust manages over $1.3 billion in assets, and the U.S. has committed an additional $500 million through 2027.

A Pioneering Approach to UBI

Dr. Huy Pham, an associate professor and crypto-fintech lead at RMIT University, described the Marshall Islands' UBI initiative as groundbreaking, being the first national UBI rollout utilizing blockchain technology. The government employs a U.S. dollar-pegged stablecoin for these payments, providing price stability and facilitating rapid, traceable transfers across numerous islands.

Current Adoption Rates of the Digital Wallet

Despite the innovative approach, the uptake of the digital wallet option has been limited, according to the Marshall Islands Social Security Administration. Approximately 60% of the initial UBI payments were disbursed through bank deposits, while most of the remaining payments were made via checks. Surprisingly, only about a dozen individuals opted for the digital wallet to receive their UBI.

Future Perspectives

Sam Altman’s World initiative, which began as Worldcoin, has similarly aligned its blockchain efforts to establish a global UBI system. This project authenticates each individual’s identity through biometric scanning, creating a "World ID" that confirms users are real people rather than bots. Those verified are allocated its native token, WLD, which might be perceived as a type of UBI within its ecosystem. Last year, World launched World Chain, an Ethereum layer-2 blockchain designed to serve its 15 million verified users, who acquire their World ID via iris scans.