Is crypto legal in Marshall Islands? Rules & regulation (2026)

Legal framework

Banking Act 1987 (as amended, governs VASPs); DAO LLC Act 2022 (amended 2023); Sovereign Currency Act 2018 (SOV, largely inactive); no standalone comprehensive digital-asset law

Status by sub-area

• Stablecoins

  Partial

  No comprehensive stablecoin-specific regulatory framework exists. The government's own USDM1 stablecoin (launched November 2025, US-Treasury-backed, issued under a New York law indenture via a public-private partnership) is the primary real-world example; private stablecoin issuance is not explicitly authorised or governed by dedicated rules.

  Still pending: Private stablecoin-issuance rules not yet established

• Exchanges / VASP

  Partial

  The Banking Act 1987 (RMI) defines VASPs and requires them to hold a financial-services-provider licence, but in practice the Banking Commissioner does not issue such licences, making lawful domestic crypto-exchange operation effectively unavailable. The November 2024 FATF MER specifically flagged inadequate VASP supervision.

  Still pending: VASP licensing regime non-functional; FATF 2024 flagged inadequate supervision

• Token Offerings

  Unclear

  The Marshall Islands has no dedicated ICO/STO prospectus regime. The 2023 DAO Act amendment explicitly excludes governance tokens lacking economic rights from securities classification under RMI law, but tokens with profit-sharing or economic rights may fall under broader securities rules; no formal guidance has been issued.

  Still pending: Formal guidance on token-offering classification and regulation not issued

• Custody

  None

  No specific crypto-custody rules (segregation, qualified-custodian standards, proof of reserves, or insurance requirements) have been enacted. Custody would fall under the general VASP definition in the Banking Act if performed as a business, but given that VASP licences are not available, no formal custody licensing pathway exists.

  Still pending: Crypto-custody rules (segregation, standards, insurance) not enacted

• DeFi

  Partial

  The Marshall Islands is proactively courting DeFi via its DAO LLC framework (2022/2023), allowing DAOs without custodial or exchange functions to operate outside VASP licensing. However, the 2024 FATF MER found DAOs functioning as de facto VASPs operating without AML/CFT supervision, and recommended extending regulatory oversight to such entities.

  Still pending: AML/CFT oversight for DAOs functioning as de facto VASPs not established

• Tax

  In force

  The Marshall Islands is a zero-tax jurisdiction for non-resident and offshore entities: no corporate income tax, no capital gains tax, and no VAT apply to crypto trading or holdings for non-resident international business companies or DAO LLCs. No crypto-specific tax reporting obligations have been enacted; residents face limited gross revenue tax but no capital gains regime.

Key points: crypto & digital assets in Marshall Islands

1. 01DAO legal recognition (2022/2023)

   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.

   coindesk.com coindesk.com

2. 02VASP licences technically required but not available

   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.

   freemanlaw.com docs.midao.org

3. 03FATF 2024 evaluation: significant gaps

   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.

   fatf-gafi.org fatf-gafi.org

4. 04Government stablecoin/UBI initiative (USDM1 / Lomalo, 2025)

   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.

   clearygottlieb.com lowyinstitute.org

5. 05SOV national cryptocurrency effectively shelved

   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.

   en.wikipedia.org davidgerard.co.uk centralbanking.com

6. 06Zero-tax regime for offshore/non-resident entities

   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.

   gsl.org cryptocurrency.law

Sources

1. 1.fatf-gafi.org/en/publications/Mutualevaluations/Marshall-Islands-MER-APG-2024.html
2. 2.fatf-gafi.org/content/dam/fatf-gafi/fsrb-mer/Marshall-Islands-MER-November-2024.pdf
3. 3.freemanlaw.com/cryptocurrency/marshall/
4. 4.docs.midao.org/rmi-dao-llc-registration-and-compliance/virtual-asset-service-provide
5. 5.coindesk.com/policy/2022/02/15/how-the-marshall-islands-is-trying-to-become-a-glob
6. 6.coindesk.com/policy/2023/10/30/marshall-islands-further-strengthens-law-that-made-
7. 7.clearygottlieb.com/news-and-insights/news-listing/marshall-islands-establishes-tokenized
8. 8.lowyinstitute.org/the-interpreter/stablecoins-universal-basic-income-pacific-islands-mo
9. 9.en.wikipedia.org/wiki/Sovereign_Currency_Act_of_2018
10. 10.gsl.org/en/taxes/marshall-islands/
11. 11.cryptocurrency.law/cryptocurrency-regulatory-framework-in-the-marshall-islands-2024/
12. 12.davidgerard.co.uk/blockchain/2021/06/04/the-marshall-islands-sov-cryptocurrency-the-sag
13. 13.centralbanking.com/central-banks/currency/digital-currencies/7959243/imf-repeats-warning