Onchain’s public benefits are the future, but challenges remain, the CEO says
Blockchain technology is an effective way to manage social benefits programs, but key compliance challenges remain, said Julie Myers Wood, CEO of compliance and monitoring consulting firm Guidepost Solutions.
Guidepost Solutions advised the Government of the Republic of the Marshall Islands on the regulatory compliance and sanctions framework for the USDDM1 bond, a government-issued tokenized debt instrument 1:1 with short-term US Treasuries.
The Marshall Islands government launched a Universal Basic Income (UBI) program in November 2025 that distributes quarterly benefits directly to citizens through mobile wallets. Wood told Cointelegraph:
“Any benefits currently being distributed by analog methods should be explored for a digital delivery option for a number of reasons. Digital delivery speeds up the process and provides a way to audit supplies and costs.”
Many governments are navigating debt instruments and managing social benefits programs on-chain, eliminating settlement delays and costly transaction fees in traditional finance, cutting out the issuance and clearing process.
Related: UK government appoints HSBC for tokenized bond pilot
As the bond market continues to grow, regulatory compliance and regulatory challenges remain
The devaluation and recent settlement periods of tokenized bonds and other onchain instruments will democratize the financial system for individuals without traditional banking infrastructure.
However, anti-money laundering (AML) requirements and sanctions compliance are significant regulatory risks for the two governments to issue onchain bonds to the public, Wood told Cointelegraph.
Governments issuing tokenized bonds should collect know-your-customer (KYC) information to ensure funds are directed to the right recipients, she added.
The token US Treasury market has grown more than 50x since 2024, according to data from crypto analytics platform Token Terminal.
The bond market could top $300 billion, according to Lamin Brahimi, co-founder of Taurus SA, an enterprise-focused digital asset services company.
Reduced settlement times, transaction costs and asset fractionation allow individuals to purchase fractions of financial assets, all of which expand investors' access to the global financial system, Brahimi told Cointelegraph.
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