Hong Kong, Thailand, and the Marshall Islands are researching the implementation of tokenized debt instruments and possibly managing social benefit programs through blockchain technology.

Julie Myers Wood, CEO of compliance consulting firm Guidepost Solutions, stated that blockchain presents an efficient means for running these programs, though it comes with specific compliance challenges. Guidepost Solutions has guided the government of the Marshall Islands in establishing a regulatory compliance framework for its USDM1 bond, secured by short-term US Treasuries.

The Marshall Islands have initiated a Universal Basic Income (UBI) program that distributes quarterly payments directly through a mobile wallet since November 2025. Wood commented:

“Any benefit that is currently being distributed through analog means should be explored for a digital delivery option for several reasons. Digital delivery speeds up the process and can provide an auditable trail for provisioning and expenditures.”

Additionally, various governments are investigating tokenized debt instruments and administering social benefit programs on-chain to eliminate traditional finance’s settlement delays and high transaction costs by removing intermediaries from the issuing and clearing process.

Regulatory Compliance and Challenges

The convenience and cost-effectiveness of tokenized bonds democratize financial access for those lacking traditional banking services, but they also introduce regulatory concerns such as anti-money laundering (AML) compliance and know-your-customer (KYC) obligations, as highlighted by Wood.

Recent reports indicate that the tokenized US Treasury market has expanded by more than 50 times since 2024. The growth in the tokenized bond sector could surge to approximately $300 billion by 2030, according to forecasts made by Lamine Brahimi, emphasizing the increasing necessity for effective compliance frameworks as this market develops.