Blockchain expertise is an efficient medium for administering social profit applications, however key compliance challenges stay, based on Julie Myers Wooden, CEO of compliance and monitoring consulting agency Guidepost Options.
Guidepost Options suggested the Republic of the Marshall Islands’ authorities on a regulatory compliance and sanctions framework for its USDM1 bond, a tokenized debt instrument issued by the federal government, backed 1:1 by short-term US Treasuries.
The Marshall Islands authorities launched a Common Primary Earnings (UBI) program in November 2025 that distributes quarterly advantages to residents immediately by way of a cell pockets. Wooden advised Cointelegraph:
“Any profit that’s at present being distributed by way of analog means must be explored for a digital supply choice for a number of causes. Digital supply hastens the method and may present an auditable path for provisioning and expenditures.”
A number of governments are exploring tokenized debt devices and administering social profit applications onchain to get rid of settlement delays and dear transaction charges inherent in conventional finance by disintermediating the issuing and clearing course of.
Associated: UK authorities appoints HSBC for tokenized bond pilot
Regulatory compliance and sanctions challenges stay because the tokenized bond market grows
The price discount and near-instant settlement instances for tokenized bonds and different onchain devices democratize entry to the monetary system for people who lack entry to conventional banking infrastructure.
Nevertheless, anti-money laundering (AML) necessities and sanctions compliance are two of the most important regulatory dangers for governments issuing onchain bonds to the general public, Wooden advised Cointelegraph.
Governments issuing tokenized bonds should additionally gather know-your-customer (KYC) data to make sure that funds are directed to the right recipients, she added.
The tokenized US Treasury market grew by over 50x since 2024, based on knowledge from crypto evaluation platform Token Terminal.
The tokenized bond market might surge to $300 billion, based on a forecast from Lamine Brahimi, co-founder of Taurus SA, an enterprise-focused digital asset providers firm.
Lowered settlement instances, transaction prices and asset fractionalization, which permits people to buy fractions of a monetary asset, all develop investor entry to the worldwide monetary system, Brahimi advised Cointelegraph.
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