Is crypto legal in Marshall Islands? Regulation & rules (2026)

The Marshall Islands was the first jurisdiction to recognise DAOs as domestic LLC-equivalent legal entities (2022). A 2023 amendment introduced Series DAO LLCs, reduced registration to 30 days, shielded DAOs from liability for open-source software they create, and clarified that governance tokens without economic rights are not securities under RMI law.

The Banking Act 1987 (RMI) §102(ii) defines VASPs and requires them to hold a financial-services-provider licence from the Banking Commissioner; however, such licences are reported as not currently being issued, creating a practical prohibition on operating licensed crypto exchanges in the jurisdiction.

The November 2024 APG Mutual Evaluation of the Marshall Islands found it rated Substantially or Highly Effective on zero of 11 effectiveness outcomes, and specifically flagged that DAOs operating as VASPs have not been brought within AML/CFT supervision, recommending that fit-and-proper and supervisory frameworks be extended to them.

In November 2024 the RMI cabinet endorsed a public-private partnership with MIBOND Global LLC to issue a sovereign digital currency. By November 2025 the 'Lomalo' digital wallet and USDM1 stablecoin (fully collateralised by short-term US Treasuries under a New York law indenture) were launched to deliver universal basic income payments.

The Sovereign Currency Act 2018 declared a blockchain-based 'Sovereign' (SOV) legal tender alongside the US dollar, but the project never launched publicly. The Act was reportedly repealed in August 2025 amid persistent IMF and US government concerns about AML/CFT risk and potential loss of correspondent banking access.

The Marshall Islands imposes no corporate income tax, capital gains tax, or VAT on non-resident international business companies; this extends de facto to crypto holdings and trading profits for offshore-structured entities. Resident individuals face limited tax obligations, and no crypto-specific reporting regime has been enacted.