Marshall Islands tests universal income in crypto with Stellar

The popularization of Bitcoin and its many digital cousins ​​never takes a vacation. From obscure forums to monetary policy, crypto is spreading its tentacles. Sometimes confusing, often disturbing, it colonizes unexpected territories. Even where it was believed that only crumpled banknotes circulated. And when an archipelago forgotten by the financial radar becomes a testing ground for a dematerialized universal income, views change. Cryptos no longer make up the numbers. They invite themselves to the public decision-making table.

Lomalo: crypto, island remedy for banking failure

Forty thousand citizens, one goal: replace tickets with bytes. In the Marshall Islands, the ENRA universal income program is moving into the digital age. No more paper checks – make way for USDM1, a token launched on Stellar and distributed via Lomalo, a digital wallet designed by Crossmint.

If this token can act as a means of exchange, it is above all its integrated yield which attracts attention. Unlike classic stablecoins, the interest goes to the citizens. “ Unlike a stablecoin, where it is the issuer who receives the return, here, it is the holder of the asset who benefits “, explains Paul Wong, director at Stellar Development Fund.

Behind Lomalo's simplified interface – without recovery phrases or complex interfaces – lies a goal: to make crypto as fluid as the water that connects the islands. Added to this is a crucial factor: banking isolation. Since 2008, banks have become rarer, to the point that there remains only one international correspondent player. What if this link breaks? The archipelago would be cut off from the global financial system.

This is not a hypothesis. It's a stress test. USDM1 could well be the sovereign alternative that other countries marginalized from the traditional banking system dream of.

Incusion: changing the social situation, far from capitals

THE project is not limited to a change of monetary support. It also affects social balance. Distributing aid directly via individual digital accounts redraws the balance of power in households, particularly among the most precarious.

This is what Paul Wong explains about the distribution of universal income:

When we distribute universal income to a woman, it does not go into a joint account where, historically, a man has used it for purposes other than those of the family.

The initiative is part of a broader strategy. Stellar is working with the UN and Germany to deploy this type of device in geopolitically unstable areas, such as Ukraine or the Middle East. The objective is clear: to put crypto at the service of those who have nothing, where cash is often a luxury.

States, which yesterday saw crypto as a threat to be regulated, are today interested in its potential for social and economic inclusion.

Numerical benchmarks to keep in mind

• 2008: start of banking isolation after the global financial crisis;
• 1 only bank still connected to the international financial system in the Marshall Islands;
• USDM1: profitable sovereign token financed by government bonds;
• Quarterly distribution via Lomalo, frictionless wallet;
• Starlink internet used to cover remote areas of the archipelago.

This is neither the first attempt nor the last. What is at stake in the Marshall Islands goes beyond their status as an island state. The future of crypto could well be written in these areas ignored by traditional infrastructures. What if the big leap came from there? Believing that only regulation, like the Clarity Act, will make prices take off is illusory. Uses, concrete needs, and social urgency will be the real drivers of the global growth of cryptos.