By John Q. Hosedrinker 
The Marshall Islands has launched a pioneering universal basic income (UBI) program, unique for its use of cryptocurrency alongside traditional payment methods. Each citizen will receive quarterly payments of around $200, aiming to alleviate rising living costs, with options for bank transfers, checks, or a government-backed digital wallet. The initiative, funded by a trust fund related to U.S. nuclear testing compensation, leverages blockchain technology to facilitate payments across the archipelago’s remote islands. While the digital payment method offers potential benefits in accessibility, especially in remote areas, challenges remain due to patchy internet connectivity and limited adoption of digital wallets.
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Marshall Islands launches the world’s first national universal basic income (UBI) scheme offering cryptocurrency, and it’s certainly sparking a lot of discussion. The core idea is simple: every citizen gets about $200 every three months. But the delivery method is where things get interesting, and potentially, complicated. They’re offering a choice: traditional methods like bank transfers or checks, or a government-backed digital currency. The cryptocurrency option is specifically designed to reach people in the more remote islands where banking access is limited.
The fact that the Marshall Islands is attempting to provide a financial safety net is definitely a positive thing. The challenges of poverty and limited resources are likely amplified by the lack of readily available banking infrastructure for many. The intention of reaching those who might otherwise be excluded is a worthy goal. The question, however, is whether cryptocurrency is the right tool for the job, especially when you consider the conditions that exist on the islands.
You see, the success of the crypto aspect hinges on a few crucial factors, notably internet and smartphone access. If these are spotty, then the crypto option immediately becomes less viable. Plus, there is the real-world application of the cryptocurrency. If you can’t easily spend it, what’s the point? If you can’t go to the local store and buy your basic needs, the scheme is less useful. As it stands, the digital currency offered is a stable coin, pegged to the USD. It’s essentially the same as direct deposit, but instead of banks being the gatekeepers of your funds, it’s a distributed ledger. This means no monthly fees, no overdraft penalties, and no need for a bank account – great advantages for many. But the reality of accessibility and usability is still a potential drawback.
It seems to me that the real-world impact will vary greatly depending on circumstances. It’s hard to ignore the fact that the Marshallese face significant economic hurdles. Many are living in a cycle of debt, and the cost of living can be high relative to income. While the intention of providing $200 every three months is a step in the right direction, it’s important to remember that it might not be enough to drastically alter anyone’s financial situation. But even a small, regular infusion of funds can provide some relief, so it’s not an entirely insignificant amount.
It is worth noting that there is a perception of this as a “scheme”. While that word has a slightly negative connotation, there is a reason for that. Any well-laid plan for action, be it for a public program or a private company, is in essence, a scheme. The goal of this scheme, at least on the surface, seems positive. And there are clear advantages to providing the option of cryptocurrency as a method of distribution.
The Marshall Islands isn’t reinventing the wheel with this cryptocurrency. It’s using an existing network (Stellar) to enable money transfers. The Marshallese government won’t have control over the ledger, preventing them from modifying the transactions. Transferring and trading should be relatively easy, cheap, and fast. The design of the plan seems well thought-out.
As with any UBI program, the questions of sustainability and infrastructure are key. Can the Marshall Islands reliably deliver this income long-term? Can they adequately support the infrastructure needed to make the crypto option truly functional? While the digital currency aspect of the scheme might capture the headlines, the more crucial aspect is simply providing citizens with some financial support. The option of direct deposit or a physical check will likely be the primary method for most people, given the limitations of technology on the islands.
In the end, this initiative is an experiment. It’s a bold one, at that. It might not be perfect, and there are valid criticisms. However, the intent to assist its citizens is the key takeaway. Time will tell if this unique approach to UBI can be a model for other places facing similar economic challenges.