Other Developments
Severe correspondent-banking concentration. The Marshall Islands' access to the international payments system now runs through a single correspondent banking relationship, held by the Bank of Marshall Islands via First Hawaiian Bank and BNP Paribas. The Ministry of Finance's own whitepaper states that Pacific remittance costs average around ten percent, roughly triple the UN Sustainable Development Goal target, and that international USD wires cost four to five times the global average with settlement taking up to a week. In response, the Marshall Islands has become one of four pilot countries, alongside Fiji, Samoa and Tonga, in a World Bank and Pacific Islands Forum project building a CBR Resilience Index intended to secure temporary correspondent-banking-relationship access for eligible Pacific institutions.
USDM1 and the Lomalo UBI disbursement. USDM1, developed with Stellar Development Foundation support, underpins the ENRA universal basic income programme, which the Stellar Development Foundation describes as the world's first onchain disbursement of universal basic income, launched in November 2025. In April 2026, Anchorage Digital, a federally chartered US digital-asset bank, announced it had begun providing institutional custody for USDM1, framing the instrument as secured sovereign debt issued under New York law. Commercial terms for both the Stellar Development Foundation's involvement and the Anchorage Digital custody arrangement were not publicly disclosed.
Cross-Monitor Connections
The correspondent-banking access crisis documented here connects directly to the financial-integrity monitor's tracking of the Marshall Islands' open ship and corporate registry, which has repeatedly surfaced in OFAC sanctions-evasion designations; a jurisdiction facing this scale of de-risking pressure has structural incentive to pursue institutional reforms such as MIMA's establishment, even as the underlying registry-enabler dynamics that help drive de-risking in the first place persist independently. The crypto monitor's tracking of USDM1's unresolved classification dispute, sovereign bond versus functional stablecoin or CBDC, bears directly on this monitor's own stablecoin and digital-money coverage, since the applicable regulatory and reserve framework for the instrument depends substantially on which characterisation prevails.
Outlook
MIMA's full supervisory build-out is expected through the fourth quarter of 2026, as scheduled, and the central question for this jurisdiction's licensing and market-access posture is whether that build-out produces a published, confirmable supervisory perimeter, particularly for USDM1, or whether the institutional architecture continues to run ahead of its documented rules. On the corridor and correspondent-banking side, the CBR Resilience Index pilot's progress will be the clearest indicator of whether multilateral intervention can meaningfully ease the single-correspondent dependency and associated cost burden documented this cycle, a structural vulnerability that is unlikely to resolve on the timescale of a single reporting cycle.
Standing brief · as of 8 September 2026
Written before the update above. Where they differ, the update is the more recent position.
Lead Signal
The Marshall Islands enters this cycle with its payments architecture in transition on three fronts at once: a consolidated regulator moving toward operational status, a single correspondent banking relationship under sustained threat, and a state-issued digital instrument facing explicit multilateral resistance to its intended scale. Public Law 2025-32, the Monetary Authority Act 2025, passed by the Nitijela, creates the legal basis for a new consolidated regulator, the Marshall Islands Monetary Authority (MIMA), to absorb banking, MSB and payment-systems oversight; implementation is in transition and not yet fully operational. Until MIMA displaces it, banks and financial services providers must be Cabinet-approved-licensed by the Banking Commissioner under 17 MIRC Ch.1 §156 of the Banking Act 1987, per the Banks and FSPs Licensing and Fees Regulations 2020, before transacting business in RMI. That produces a near-term period of overlapping authority between the incoming and incumbent licensing regimes. The most acute vulnerability sits in correspondent banking: the Bank of the Marshall Islands' only remaining correspondent relationship is with First Hawaiian Bank, which has sought to end the relationship since 2014 and retains it only until BOMI finds another correspondent bank, against a backdrop in which RMI has lost approximately 700 correspondent banking relationships since 2008. That fragility is the direct backdrop to USDM1, the digital sovereign bond distributed via the Lomalo wallet from November-December 2025 to pay the ENRA universal basic income. The IMF's 2025 Article IV Consultation characterises USDM1 as a 'digital sovereign bond' distinct from a privately issued stablecoin, and recommends the authorities not proceed with its planned global launch given insufficient capacity to mitigate associated risks. The initiative follows the repeal, in August 2025, of the Sovereign Currency Act of 2018, which had declared the Sovereign (SOV) legal tender, after years of IMF opposition and non-implementation. Early uptake data reinforces the IMF's caution: of the first round of ENRA disbursements, about 60% went out as direct bank deposits and the remainder as bank checks, with only about 12 people opting to receive payment in USDM1 itself.
Other Developments
Away from the correspondent-banking and digital-currency headline, the FDIC adopted a final rule, effective 22 April 2026, providing that it will insure deposits of all branches of U.S.-insured depository institutions in the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. Card infrastructure remains a separate point of fragility: the Bank of the Marshall Islands' card system functions as a closed-loop domestic network unsupported by Visa or Mastercard and cannot accept international cards, contributing to card-transaction costs far above global averages. No domestic PCI DSS mandate, interchange regulation, or card-scheme technical-standards regime was identified. Merchant acquiring is correspondingly thin and largely informal: only larger hotels, restaurants and stores in Majuro accept cards, and Bank of Guam provides the main card-acceptance and dispute/chargeback infrastructure available locally. Consumer protection in payments is similarly underdeveloped: there is no dedicated APP-fraud reimbursement scheme, financial ombudsman, or standalone consumer-protection statute, with safeguards arising indirectly from AML/KYC account-opening requirements and voluntary payment-method choice in the ENRA programme design. On financial-crime standing, RMI is an APG member subject to mutual evaluation of its AML/CFT/CPF measures and is not currently on the FATF grey or black lists, with core domestic AML measures dating to the early 2000s, including the USD 10,000 cash-transaction reporting threshold enforced by the Banking Commission. On the commercial side, Crossmint closed a Series A-II funding round on 24 September 2025, with Flourish Ventures among the investors, and the Stellar Development Foundation issued a multimillion-dollar grant in December 2025 to fund USDM1's development.
Cross-Monitor Connections
The IMF's Article IV recommendations tie continued correspondent-banking access to AML/CFT strengthening, and the AML/CFT position carried here is sourced from the Sentinel feed as payments-context only. The original analysis of illicit-finance risk and the drivers of correspondent-bank de-risking behind the Bank of the Marshall Islands' single remaining relationship belongs to the Financial Intelligence Monitor rather than to this brief.
Outlook
The signals to watch next are the implementation timeline for MIMA and whether it pursues direct U.S. Federal Reserve master account access, the outcome of BOMI's search for a replacement or additional correspondent banking relationship beyond First Hawaiian Bank, the status of a proposed US funding amendment that would permit direct USDM1 UBI disbursement rather than routing through paper checks, and the passage or enactment status of RMI's draft Cyber Security Act and Cyber Crimes Act. Each bears directly on whether RMI's payments system stabilises around the new consolidated regulator and a diversified settlement channel, or remains dependent on a single correspondent relationship and a digital-bond pilot that the IMF has so far declined to endorse for wider use.