The Marshall Islands has introduced a national universal basic income (UBI) scheme that offers payments via cryptocurrency, alongside more traditional methods, which experts say is the first scheme of its kind in the world.
Under the program, every resident citizen of the Marshall Islands will receive quarterly payments of about US$200 as part of a government effort to ease cost of living pressures. The first instalments were paid late last month and recipients can choose whether the money is paid into a bank account, by check or delivered as cryptocurrency on the blockchain through a government-backed digital wallet.
“We the government want to make sure no one is left behind,” Marshall Islands’ minister for finance David Paul said.
Photo: Reuters
“US$200 per person per quarter, which is about US$800 a year, does not compel you to quit your job … but it’s actually like a morale booster for people.”
An archipelago in the Pacific Ocean, the Marshall Islands lies between Hawaii and Australia, and has a population of about 42,000. Paul said the payments were intended as a “social safety net” as the country faces rising costs and citizens leaving.
The UBI scheme is financed by a trust fund created under an agreement with the US, which in part aims to compensate the Marshall Islands for decades of American nuclear testing. The fund holds more than US$1.3 billion in assets, with the US committing a further US$500 million through to 2027.
Photo: Reuters
Huy Pham, associate professor and crypto-fintech lead at RMIT University, said the Marshall Islands scheme “is the world first for a national rollout of a UBI program.” He said the use of blockchain technology is “unique in terms of a nation-wide implementation.”
The cryptocurrency delivery option — which involves the transfer of a digital token known as a stablecoin, pegged to the US dollar — was designed to address the practical challenge of delivering the money across hundreds of remote islands.
“We saw the opportunity in what the blockchain has to offer,” Paul said.
Photo: Reuters
Blockchain is best known as the technology behind bitcoin and other cryptocurrencies, but can also be used to store and transfer more traditional assets — like government bonds — which the Marshall Islands is using to underpin their digital payment scheme.
But according to Pham, digital payments alone do not necessarily provide financial inclusion, especially in a country like the Marshall Islands where Internet connectivity is patchy and frequently disrupted.
“Improving Internet coverage, improving smartphone penetration — all these kinds of things are the minimum for a blockchain-based economy,” he said.
Most recipients are choosing to receive payments through conventional channels. According to the Marshall Islands Social Security Administration, about 60 percent of the first round of payments were deposited directly into bank accounts, with the remainder issued as paper checks. Only a small number of people — about 12 so far, officials say — have signed up to receive payments on their digital wallet
Anelie Sarana, the finance manager involved in the rollout, said over the past year her team has travelled to the outermost islands of the country to register people in the scheme.
Sarana said many recipients were using the money immediately for basic needs, like food and essentials, while others used the US$200 to pay for celebrations to commemorate the annual Gospel Day holiday which coincided with the first distribution.
“I know they’re happy, because you can see in the streets, there’s so much traffic, it’s like there’s a big something happening,” she said.
This is not the first time the Marshall Islands has experimented with using cryptocurrency. In 2018, the government attempted to create a national cryptocurrency known as the Sovereign, or SOV. The plan ultimately stalled after warnings from the International Monetary Fund (IMF).
The IMF has cautioned that while the technology underpinning the latest scheme is innovative, the blockchain-based delivery of universal basic income carries “financial, fiscal, legal, reputational and financial integrity risks,” particularly if governance and oversight are not robust.
Monique Taylor, a lecturer in world politics at the University of Helsinki, said it was hard to predict if the Marshall Islands’ experiment with a universal basic income and a cryptocurrency delivery system would succeed.
“Universal income schemes are rare, particularly at national scale, and there are no direct precedents that combine this fiscal architecture with a digital delivery component in a small island state,” she said.
But, she believed the scheme did present benefits for small island nations.
“In a geographically dispersed island state where conventional banking infrastructure can be limited, a digital wallet may lower frictions and make transfers more accessible, particularly in outer atolls,” she said.
Recently the Chinese Nationalist Party (KMT) and its Mini-Me partner in the legislature, the Taiwan People’s Party (TPP), have been arguing that construction of chip fabs in the US by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is little more than stripping Taiwan of its assets. For example, KMT Legislative Caucus First Deputy Secretary-General Lin Pei-hsiang (林沛祥) in January said that “This is not ‘reciprocal cooperation’ ... but a substantial hollowing out of our country.” Similarly, former TPP Chair Ko Wen-je (柯文哲) contended it constitutes “selling Taiwan out to the United States.” The two pro-China parties are proposing a bill that
March 9 to March 15 “This land produced no horses,” Qing Dynasty envoy Yu Yung-ho (郁永河) observed when he visited Taiwan in 1697. He didn’t mean that there were no horses at all; it was just difficult to transport them across the sea and raise them in the hot and humid climate. “Although 10,000 soldiers were stationed here, the camps had fewer than 1,000 horses,” Yu added. Starting from the Dutch in the 1600s, each foreign regime brought horses to Taiwan. But they remained rare animals, typically only owned by the government or
Institutions signalling a fresh beginning and new spirit often adopt new slogans, symbols and marketing materials, and the Chinese Nationalist Party (KMT) is no exception. Cheng Li-wun (鄭麗文), soon after taking office as KMT chair, released a new slogan that plays on the party’s acronym: “Kind Mindfulness Team.” The party recently released a graphic prominently featuring the red, white and blue of the flag with a Chinese slogan “establishing peace, blessings and fortune marching forth” (締造和平,幸福前行). One part of the graphic also features two hands in blue and white grasping olive branches in a stylized shape of Taiwan. Bonus points for
Last month, media outlets including the BBC World Service and Bloomberg reported that China’s greenhouse gas emissions are currently flat or falling, and that the economic giant appears to be on course to comfortably meet Beijing’s stated goal that total emissions will peak no later than 2030. China is by far and away the world’s biggest emitter of greenhouse gases, generating more carbon dioxide than the US and the EU combined. As the BBC pointed out in their Feb. 12 report, “what happens in China literally could change the world’s weather.” Any drop in total emissions is good news, of course. By
RSS