Giff
Johnson RNZ Pacific Marshall Islands
correspondent
The Pacific Islands Forum (PIF) finance
ministers got hands-on experience using the Marshall
Islands’ new digital money system as they kicked of their
annual meeting in Majuro on Tuesday.
The two-day 2026
Forum Economic Ministers Meeting officially kicked in Majuro
yesterday, including private sector and civil society
dialogues, which a heavy agenda focused on around addressing
economic shocks from volatile fuel prices resulting from the
US/Israel war on Iran.
The meeting, attended by PIF
secretary-general Baron Waqa, aims to endorse economic plans
and partnerships for stability and growth for the Blue
Pacific Continent, with a particular focus on the private
sector, fisheries, climate and disaster preparedness, and
non-communicable diseases.
As part of the private
sector dialogue, Finance ministers will receive a
presentation about the Marshall Islands USDM1 digital money
program that was launched late last year and has picked up
significant momentum in recent weeks with banks and money
services now accepting it.
The summit featured a
presentation by USDM1 representatives Tuesday followed by a
hands-on experience with the Lomalo Wallet used for the
USDM1 digital tokens.
To give visitors from the PIF
nations a taste of the Lomalo Wallet, Marshall Islands
authorities loaded US$100 into digital Lomalo Wallets for
the heads of each delegation. These could be used at
Tuesday’s night market, where vendors accept the digital
payment system.
Advertisement – scroll to continue reading
What makes USDM1 stand out from the
many stable coins and cryptocurrencies on the market is that
it is a digital sovereign bond, a US dollar-denominated
government security fully collateralised by short-dated US
Treasury bonds that can be redeemed for $1. Thus, say USDM1
program officials, each token a person has is equivalent to
one US dollar. Thanks to recent developments, these can be
“cashed out” to US dollars through various options now
available to USDM1 holders.
The planned USDM1 exposure
to Pacific Island Finance ministers is the latest
development in the ongoing rollout of this country’s digital
money system. It has been promoted to safely and effectively
deliver quarterly universal basic income payments to the
thousands of islanders living on remote atolls in this
watery nation.
An important development of USDM1
includes gaining acceptance by multiple local stores, not
only in Majuro but also in the country’s second urban
center, Ebeye, and the outer islands.
“Lomalo is now
accepted by more than 30 merchants locally, with businesses
in Arno, Wotje, Ebeye, Jaluit, and Majuro participating,”
Jeremy Coffey, one of the USDM1 founders, said in an
interview last week.
Of great significance to the
expansion of the Lomalo Wallet system’s use for buying and
selling products and transferring money is the ability to
“cash out” or transfer USDM1 to US dollars.
Although
USDM1 is a US dollar-denominated bond issued digitally on
blockchain, it still needs a method or platform for moving
USDM1 from the digital world to currency.
The
partnership announced in April between USDM1 and Anchorage
Digital helped this process along. Anchorage Digital is
providing custody, settlement and collateral management
services for USDM1.
Since the partnership with
Anchorage Digital was announced, the USDM1 group has worked
to expand uses and “cash out” options.
The first cash
out integration is going live now and will offer holders of
funds in Lomalo Wallets the ability to exchange their funds
in Lomalo at any MoneyGram location, said Coffey.
“Additional benchmarks for this phase include a broader
series of bank integrations, which will be launching and
announced later this month.”
Marshall Islands Finance
Minister David Paul said Sunday that Bank of Guam, a
US-licenced bank, was trialing the process last weekend of
integrating USDM1 with its customers’ bank accounts to allow
them to move USDM1 to US dollars through the bank.
In
addition, he said last week, he performed a USDM1 transfer
through the money transfer service tMoneyGram to his
personal bank account at Bank of Marshall Islands,
translating USDM1 to a US dollars bank account.
“This
is monumental,” Paul said of Bank of Guam validating the use
of USDM1 and MoneyGram acceptance. “It’s a
gamechanger.”
In general banks are standoffish when it
comes to cryptocurrency because of risks of money laundering
and other concerns.
But the fact that USDM1 is a
Marshall Islands government-backed short-term US Treasury
bond issuance, denominated in US dollars, provides a US
dollar foundation for the program.
Over the past six
months, USDM1 “focused on validating Lomalo and USDM1 in
controlled pilots on a path towards broader release,” said
Coffey.
That release is now taking off. The
presentation and hands-on use of the Lomalo Wallets in
Majuro by visiting Finance ministers is the latest in the
rollout of the new
program.
New Zealand’s public broadcaster, providing comprehensive NZ news and current affairs, specialist audio features and documentaries.
Radio New Zealand is a Crown entity established under the Radio New Zealand Act 1995. Radio New Zealand News are vital elements in our programming, providing impartial news and information to New Zealanders every day. Radio New Zealand (RNZ) provides listeners with exciting and independent radio programmes in accordance with the Radio New Zealand Charter.
