Pacific finance ministers get hands-on with Marshall Islands digital money

Finance ministers from the Pacific Islands Forum (PIF) gained firsthand experience with the Marshall Islands' innovative digital currency, USDM1, as their annual meeting commenced in Majuro. The two-day Forum Economic Ministers Meeting included dialogues with the private sector and civil society, focusing on economic resilience against volatile fuel prices, partly attributed to the U.S./Israel war on Iran.

The meeting, attended by PIF Secretary-General Baron Waqa, aims to solidify economic plans and partnerships for stability and growth across the Blue Pacific Continent. Key areas of focus include the private sector, fisheries, climate and disaster preparedness, and non-communicable diseases. As part of the private sector engagement, ministers received a presentation on the USDM1 digital money program, launched late last year and recently gaining significant traction with banks and money services.

Ministers were given a practical demonstration of the Lomalo Wallet, the application used for USDM1 digital tokens. Each delegation head received US$100 loaded onto their digital wallets, which could be used at the night market, where vendors accept the digital payment system. This initiative provided a tangible taste of the system's functionality for the visiting dignitaries.

What distinguishes USDM1 is its nature as a digital sovereign bond, a U.S. dollar-denominated government security fully backed by short-dated U.S. Treasury bonds, redeemable at $1 per token. Program officials emphasize that each token is equivalent to one U.S. dollar and can be converted back to U.S. dollars through various available options. The USDM1 program is also being promoted as a secure and effective method for delivering quarterly universal basic income payments to residents on remote atolls. The system has seen growing acceptance, with over 30 merchants in Majuro, Ebeye, and outer islands now participating, facilitating everyday purchases and money transfers.

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Lomalo is now accepted by more than 30 merchants locally, with businesses in Arno, Wotje, Ebeye, Jaluit, and Majuro participating.