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 in late November and recipients can choose whether the money is paid into a bank account, by cheque, or delivered as cryptocurrency on the blockchain through a government-backed digital wallet.

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 United States, which in part aims to compensate the Marshall Islands for decades of American nuclear testing. The fund holds more than $1.3bn in assets, with the US committing a further $500m through to 2027.

Most recipients are choosing to receive payments through conventional channels. According to the Marshall Islands Social Security Administration, about 60% 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

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).