Marshall Islands Introduces Digital Wallet for Universal Basic Income Program
The Republic of the Marshall Islands has announced the launch of a government-issued digital asset as part of its Universal Basic Income (UBI) program, allowing citizens to access funds through a digital wallet called Lomalo. 
The digital wallet will utilize the U.S. dollar-pegged stablecoin USDM1, providing citizens with a secure and convenient way to access their UBI funds.
According to the government, the first disbursement of funds will be made at the end of November, allowing citizens to access them through their wallet, check, or direct deposit. This initiative aims to strengthen the country’s financial systems and ensure that no community is left behind. As Marshall Islands Finance Minister David Paul stated, “By introducing a secure digital option in addition to our traditional methods, we are strengthening our financial systems and ensuring no community is left behind.”
Blockchain Technology and Digital Assets in the Pacific Islands
Neighboring Pacific island nations have also launched similar programs, showcasing the growing adoption of blockchain technology and digital assets in the region. For instance, Palau has introduced a stablecoin on the XRP ledger for government employees, while the Central Bank of Solomon Islands has launched Bokolo Cash for peer-to-peer transactions and retail payments in the national capital Honiara. These initiatives demonstrate the potential of digital assets to enhance financial inclusion and access to financial services in remote and underserved communities.
Citizens can transfer funds to other registered Lomalo users, and currently, only citizens who are registered with the Bank of the Marshall Islands (BGE) can set up a wallet. This digital wallet is an important step towards increasing financial accessibility and promoting economic development in the Marshall Islands.
IMF Warnings and Regulatory Considerations
The launch of the digital wallet and UBI program comes after warnings from the International Monetary Fund (IMF) regarding the use of digital assets in the Marshall Islands. In 2023, the IMF called on the government to reconsider its central bank digital currency program, citing significant risks and a lack of necessary capacity. The IMF also expressed concerns about the potential adverse impacts on macro-fiscal and financial integrity, particularly with regards to the expansion of Decentralized Autonomous Organizations (DAOs) and the launch of the UBI program using the “untested” USDM1 stablecoin.
Despite these warnings, the Marshall Islands government has proceeded with the launch of the digital wallet and UBI program, highlighting the need for careful consideration and regulation of digital assets in the region. As the use of digital assets continues to grow, it is essential for governments and regulatory bodies to strike a balance between promoting innovation and ensuring financial stability and security.
For more information on the Marshall Islands’ Universal Basic Income program and digital wallet, please visit https://cointelegraph.com/news/marshall-islands-universal-basic-income-digital-wallet?utm_source=rss_feed&utm_medium=rss_tag_regulation&utm_campaign=rss_partner_inbound
