MH

Licensing, Authorisation & Market Access

Banks and financial services providers must be Cabinet-approved-licensed by the Banking Commissioner under 17 MIRC Ch.1 §156 of the Banking Act 1987, per the Banks and FSPs Licensing and Fees Regulations 2020, before transacting business in RMI; this licensing gate applies to both bank and non-bank payments entrants seeking market access. Public Law 2025-32, the Monetary Authority Act 2025, passed by the Nitijela, creates the legal basis for a new consolidated regulator, the Marshall Islands Monetary Authority (MIMA), to absorb banking, MSB and payment-systems oversight; implementation is in transition and not yet fully operational. Because MIMA has not yet displaced the Banking Commissioner structure, licensing and prudential authority currently sits in a near-term period of overlapping regimes, with the primary legislative text of the Monetary Authority Act itself not independently retrievable this cycle and the claim resting on secondary Ministry of Finance corroboration.

Conduct, Safeguarding & Promotions

Cash transactions and transfers exceeding USD 10,000 are reported by banks to the Banking Commission, which has authority to investigate financial records when necessary. This reporting duty sits within the Banking Act 1987 framework and applies specifically to bank-PSP conduct rather than to non-bank payment institutions, for which no distinct conduct or safeguarding regime was identified this cycle. No dedicated financial-promotions statute was identified for RMI-registered payment entities.

Stablecoins & Digital Money

The Sovereign Currency Act of 2018, which declared the Sovereign (SOV) legal tender, was repealed in August 2025 after years of IMF opposition and non-implementation. The IMF's 2025 Article IV Consultation characterises USDM1 as a 'digital sovereign bond' distinct from a privately issued stablecoin, and recommends the authorities not proceed with its planned global launch given insufficient capacity to mitigate associated risks.

Operational Resilience & Critical Infrastructure

BOMI's card system functions as a closed-loop domestic network unsupported by Visa or Mastercard and cannot accept international cards, contributing to card-transaction costs far above global averages. No enacted cyber or critical-infrastructure statute was identified this cycle.

Outlook

Passage of RMI's draft Cyber Security Act and Cyber Crimes Act remains unconfirmed and is a dated item to track.

Scheme & Network Compliance

The dominant domestic card infrastructure operates as a closed-loop network outside the Visa/Mastercard schemes; no domestic PCI DSS mandate, interchange regulation, or card-scheme technical-standards regime was identified.

Outlook

Any scheme engagement with RMI's domestic network would first require the absent technical-standards regime to be built out, a gap unlikely to close in the near term.

Payment Corridor Dynamics

Pacific remittance-corridor fees average roughly 10% (triple the UN SDG target) and international USD wires can take up to a week to settle because of correspondent-banking constraints. This corridor friction sits on top of RMI's structural correspondent-banking fragility, with the US-MH USD corridor dependent on a single correspondent relationship.

Outlook

The Lomalo/USDM1 pilot is being tested as an alternative settlement channel for this corridor, though its uptake so far has been modest relative to conventional bank deposits and checks.

Industry Structure & Commercial Dynamics

Crossmint, an infrastructure provider, and the Stellar Development Foundation, a grant funder, built and funded the Lomalo wallet and USDM1 blockchain rail, marking the first substantive private or foreign fintech presence in RMI's payments market. This entry sits against a domestic banking market otherwise limited to a small number of established bank incumbents.

Legal & Litigation

In 1996 the FDIC issued Special Alert FIL-57-96 after banks received inquiries about fraudulent 'Bank Guarantee' instruments issued by the Marshall Islands Development Bank; RMI subsequently announced the instruments were withdrawn and voided. No active domestic court litigation targeting RMI payments or banking regulation was identified this cycle.

Outlook

This remains a dated historical reference point rather than a live litigation risk; no near-term developments are expected absent a new filing.

Merchant Acquiring & Risk

Merchant acquiring is thin and largely informal: only larger hotels, restaurants and stores in Majuro accept cards, and Bank of Guam provides the main card-acceptance and dispute/chargeback infrastructure available locally.

Outlook

Thin acquiring infrastructure signals limited near-term addressable market for any merchant-acquiring vendor considering entry.

Product Innovation & Market Development

Following the November 2025 launch distributing the ENRA universal basic income, about 60% of first-round payments were direct bank deposits, the remainder bank checks, and only about 12 people opted to receive payments in USDM1. This product sits at the centre of RMI's correspondent-banking workaround strategy, testing whether a digital-wallet rail can substitute for cash-based and correspondent-dependent distribution in a dispersed-atoll context.

Consumer Protection & APP Fraud

There is no dedicated APP-fraud reimbursement scheme, financial ombudsman, or standalone consumer-protection statute for payments in RMI; safeguards are indirect, arising from AML/KYC account-opening requirements and voluntary payment-method choice in the ENRA UBI programme design.

Outlook

This remains an under-indexed area of RMI's payments framework, with no announced plans this cycle to introduce dedicated consumer-protection legislation.

AML/CFT & Financial Crime

This position is sourced from the Sentinel.gi feed as payments-context only; no original illicit-finance analysis is performed here. RMI is an APG member subject to mutual evaluation of its AML/CFT/CPF measures and is not currently on the FATF grey or black lists; core domestic AML measures date to the early 2000s, including the USD 10,000 cash-transaction reporting threshold, a shell-bank prohibition, and licence suspension or revocation powers tied to money-laundering suspicion.

Correspondent Banking, Settlement & Access

The defining asymmetry in this module is access: BOMI's only remaining correspondent banking relationship is with First Hawaiian Bank, which has sought to end the relationship since 2014 and retains it only until BOMI finds another correspondent bank, against a backdrop in which RMI has lost approximately 700 correspondent banking relationships since 2008. The FDIC adopted a final rule, effective 22 April 2026, providing that it will insure deposits of all branches of U.S.-insured depository institutions in the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

Commercial Intelligence (M&A, Investment & Product)

Crossmint's latest funding round was a Series A-II on 24 September 2025, with Flourish Ventures among the investors; the company has raised USD 23.6M cumulatively over 8 rounds, though the amount for the September 2025 round itself was not publicly disclosed. The Stellar Development Foundation issued a multimillion-dollar grant in December 2025 to fund the development of USDM1, the RMI's digitally issued sovereign bond; the grant amount was not publicly disclosed. The Lomalo wallet and USDM1 launched in November-December 2025, replacing a cash-delivery UBI model in which physical dollars arrived quarterly by shipping container subject to purchase caps and withdrawal limits.