Marshall Islands Launches World's First Crypto-Enabled Universal Basic Income

Source: DefiPlanet Original Title: Marshall Islands Launches World’s First Crypto-Enabled Universal Basic Income Original Link: https://defi-planet.com/2025/12/marshall-islands-launches-worlds-first-crypto-enabled-universal-basic-income/

Quick Breakdown

• Marshall Islands launches blockchain-based UBI paying citizens quarterly in cryptocurrency.
• The majority of residents still prefer traditional payments; digital wallets see limited adoption.
• Cayman Islands introduces new licensing rules for crypto custody and trading platforms.

Blockchain Integration in National Welfare

The Marshall Islands has rolled out a groundbreaking national universal basic income (UBI) program that allows residents to receive payments in cryptocurrency, marking the first initiative of its kind globally. Every citizen is entitled to quarterly payments of roughly US$200 to ease cost-of-living pressures in the Pacific nation of around 42,000 people. The first payments were disbursed in late November, and recipients can choose to receive funds via bank transfer, cheque, or a government-backed digital wallet on the blockchain.

Finance Minister David Paul described the program as a “social safety net” designed to ensure no citizen is left behind amid rising costs and population decline. The UBI is funded by a trust set up in agreement with the United States, partly to compensate for historical nuclear testing, with assets exceeding $1.3 billion and additional US contributions of $500 million scheduled through 2027.

Experts highlight the scheme’s unique use of blockchain technology. Dr Huy Pham, crypto-fintech lead at RMIT University, called it the “world’s first nationwide rollout of a UBI program” leveraging blockchain to deliver digital payments securely. Beyond cryptocurrencies, the technology can also store and transfer traditional government assets, which the Marshall Islands plans to utilize as part of the program’s digital infrastructure.

Adoption Challenges and Digital Divide

Despite the digital option, most residents are opting for conventional payment methods. The Social Security Administration reported that around 60% of initial payments were deposited into bank accounts, with the remainder issued via paper checks, and only a handful of users have activated the digital wallet option so far.

Experts warn that limited internet access and low smartphone penetration remain hurdles for blockchain adoption. Anelie Sarana, the finance manager overseeing the rollout, emphasized efforts to reach even the most remote islands to ensure full participation.

While the Marshall Islands focuses on blockchain-based welfare, the Cayman Islands has introduced new licensing requirements for cryptocurrency custody and trading platforms. The move signals a major regulatory shift in the British Overseas Territory.