The Republic of the Marshall Islands (RMI) today announced a strategic partnership with Inca Digital, a leader in blockchain market intelligence and risk analytics, to enhance real-time market surveillance and compliance monitoring for USDM1, the world’s first digitally native, fully collateralized sovereign bond.
USDM1 serves as a disbursement rail for the RMI’s nationwide universal basic income program, known locally as ENRA. It is also designed to support regulated institutional use in derivatives and repo markets as dual-recourse sovereign collateral across trading and financing workflows.
Under the partnership, Inca Digital - recognized for its expertise in real-time risk monitoring and digital asset intelligence - provides an integrated oversight framework for USDM1, including real-time surveillance, transaction monitoring, anomaly detection, cybersecurity support, and rapid incident response. These capabilities are designed to strengthen AML/CFT compliance, detect and deter market manipulation, and enhance the operational resilience and security of USDM1.
USDM1 is a U.S. dollar-denominated sovereign bond, collateralized 1:1 by short-dated U.S. Treasury instruments and issued natively by the sovereign on the blockchain. It combines the legal safeguards of traditional government securities with the efficiencies and transparency of 24/7 blockchain settlement.
Through ENRA, Marshallese citizens can choose to receive quarterly UBI disbursements in USDM1 directly into a mobile wallet, reducing reliance on physical cash deliveries and cheques across a geographically dispersed nation with limited traditional banking infrastructure. The program marks a modernization of sovereign digital finance and a defining advance in citizen-centered benefit distribution.
Adam Zarazinski, CEO of Inca Digital, said:
“We built Inca Digital to bring real oversight to markets that matter. The RMI issuing sovereign debt on-chain and routing it directly to citizens - that matters. There’s no higher-stakes application for what we do.”
Hon. David Paul, Minister of Finance, Republic of the Marshall Islands, said:
“This partnership enhances USDM1 with real-time market oversight and sharper risk detection, making our systems more resilient and responsive. It reinforces our ability to identify unusual activity while strengthening transparency and security. At the domestic level, Inca Digital’s involvement strengthens operational resilience, helping build stronger infrastructure while delivering practical benefits for citizens. The same systems also enhance and protect regulated, compliant institutional use.”
About Inca Digital
Founded in 2019, Inca Digital provides comprehensive data analytics, intelligence, and risk management solutions to the global crypto and financial industries, with a focus on security, transparency, and actionable insights.
About USDM1
USDM1 is USD-denominated sovereign debt issued natively on-chain by the Republic of the Marshall Islands, secured 1:1 by short-duration U.S. Treasury instruments held in bankruptcy remote custody. The RMI operates exclusively on the U.S. dollar standard under its Compact of Free Association with the United States, which establishes the dollar as its sole legal tender. For more, see the government’s white-paper “Financial Access and the Path to USDM1.”
USDM1 is structured in the style of a fully collateralized Brady bond under New York law, with an explicit customary waiver of sovereign immunity. USDM1 provides holders with a perfected first-priority security interest in collateral. Unlike privately issued digital dollar instruments, USDM1 is structured as sovereign debt with collateral perfected by control under UCC, enabling compatibility with ISDA netting frameworks and supporting inclusion in ISDA netting sets. As institutional-grade collateral, USDM1 supports integration in institutional margin, repo and financing workflows and operates within existing legal, accounting, and capital frameworks, improving capital efficiency and balance sheet treatment.
Cleary Gottlieb serves as issuer’s counsel and advised with respect to the structuring of the instrument under New York law with the participation of partners specializing in sovereign debt, UCC and secured transactions, creditors’ rights, netting and digital asset market infrastructure.
USDM1’s structure has been developed with legal analysis from Cleary Gottlieb Steen and Hamilton LLP and accounting analysis prepared by Anderson. The statements herein regarding the legal and/or accounting aspects of the product are provided by these advisors and the issuer and have not been verified by Inca Digital.
The content of this communication is for informational purposes only and is not intended to market, offer, or solicit you to buy or sell any financial product directly from us or otherwise. The Republic of the Marshall Islands has not registered any offering of USDM1 under the U.S. Securities Act, or any other U.S. federal and state securities laws. Accordingly, USDM1 may not be offered, sold, pledged or otherwise transferred in the United States or to U.S. investors, unless they are registered, or exempt from, or not subject to, registration under the U.S. Securities Act. Likewise, nothing in this communication should be construed as, or constitutes, a recommendation, by us or any third party, to acquire or dispose of any investment or security, or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.
This communication may contain forward-looking statements. These statements are statements that are not historical facts. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions are intended to identify forward-looking statements. Statements regarding trends relating to the Republic of the Marshall Islands or USM1, and future expansions or projects relating to Republic of the Marshall Islands or USM1 are examples of forward-looking statements. Such statements reflect the current views of the Republic of the Marshall Islands and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. USDM1 is secured on a 1:1 basis. Small amounts of collateral may be kept as U.S. Government money market funds, stablecoins or other digital assets as a liquidity reserve to process redemption requests. Collateral may be subject to customary limited liens in favor of the custodian.
The statements herein regarding the legal and/or accounting aspects of the product are provided by M1X and have not been verified by Inca Digital.
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