Marshall Islands launches universal basic income program using digital wallet

The Republic of the Marshall Islands just dropped a digital wallet called Lomalo for its Universal Basic Income program — and they're doing it with a US dollar-pegged stablecoin called USDM1. First disbursement hits in late November, and citizens can access funds through the wallet, physical checks, or direct deposit. Talk about options!

This isn't the first Pacific island nation to go digital. Palau launched a stablecoin on the XRP Ledger for government employees, and the Solomon Islands rolled out Bokolo Cash for P2P transactions in Honiara. The Marshall Islands is keeping it exclusive though — only citizens registered for the UBI can set up a Lomalo wallet, and they can transfer to other registered users.

The IMF has been side-eyeing this move hard. Back in 2023, they told the Marshall Islands to reconsider their CBDC program (then called SOV). Fast forward to September 2025, and the IMF straight up said: “Current plans to issue a ‘digital sovereign bond’ carry significant risks relative to perceived returns... the authorities should not proceed with the global launch as planned.”

The IMF is worried about DAOs (which the Marshall Islands started recognizing as legal entities in 2022) and this “untested” USDM1 having “adverse macro-fiscal and financial integrity implications.” Their advice? Scale back the UBI to target those who need it most.

But David Paul isn't backing down. He told Cointelegraph they're in “active dialogue with the IMF” and defended USDM1 as “issued under New York law and backed 1:1 by short-term US Treasuries held in a bankruptcy-remote account held by a US-based Qualified Custodian.” He claims the structure mirrors the “Brady-style framework historically supported by the IMF” — not some random private digital token.