Republic of the Marshall Islands Establishes Program for Continuous Offerings of Tokenized Bonds for Use in Universal Basic Income Program

Cleary Gottlieb represented the Republic of the Marshall Islands in establishing a program for continuous Reg S offerings of up to an initial $100 million aggregate principal amount of tokenized perpetual adjustable-rate secured bonds.

The program marks the first tokenized bond program by a sovereign entity and represents a significant milestone in the evolution of financial instruments and digital asset infrastructure in the Marshall Islands. It is expected to expand investment opportunities and facilitate the development of systems that enhance financial inclusion for the Marshallese people.

Under the program, the bonds are issued in dematerialized (electronic) and uncertificated form only, recorded in book-entry form based on the holdings of tokens issued on a blockchain network. Interest on the bonds will be capitalized periodically, and holders will be able to redeem each of their bonds at any time for one U.S. dollar to liquidate their investments, similar to a stablecoin.

The Republic will invest the offering proceeds in high-grade assets serving as collateral for the bonds. The yield and other proceeds from these assets, after deducting a designated portion representing the Republic’s gain, will be applied to meet redemptions of the bonds.

An inaugural first-unit issuance under the program occurred on September 23, 2025. The Republic intends to utilize the tokenized bonds to support its universal basic income (UBI) program, allowing citizens of the Marshall Islands to claim their UBI entitlements in the form of tokens representing the bonds.

The Cleary corporate team included partners David Lopez, Juan Giráldez, and Brandon Hammer; partner-elect Ignacio Lagos; and associate David Schechtman, with assistance from law clerk Negin Shahiar. Counsel emerita Sandra Rocks and counsel Victor Chiu advised on UCC matters. Partner Jason Factor, counsel Jonathan Gifford, and associate Kelsey Barthold advised on tax matters. Associate Alec Mitchell advised on regulatory matters.