Blockchain technology offers significant efficiency gains for government social benefit programs and bond issuances, but major compliance hurdles persist. According to compliance expert Julie Myers Wood, digital delivery speeds up processes and creates auditable trails. However, anti-money laundering and sanctions compliance remain key regulatory risks that require robust know-your-customer frameworks. The market for tokenized U.S. Treasuries has grown by over 50 times since 2024, with forecasts suggesting the broader tokenized bond market could reach $300 billion.
Blockchain technology is an effective medium for administering social benefit programs, but key compliance challenges remain according to Julie Myers Wood, CEO of consulting firm Guidepost Solutions. The firm advised the Republic of the Marshall Islands on a regulatory framework for its USDM1 bond, a tokenized instrument backed by U.S. Treasuries.
The Marshall Islands government launched a Universal Basic Income program in November 2025 that distributes quarterly benefits through a mobile wallet. Wood stated, “Any benefit that is currently being distributed through analog means should be explored for a digital delivery option for several reasons.”
She explained that “Digital delivery speeds up the process and can provide an auditable trail for provisioning and expenditures.” Several governments are exploring tokenized debt and onchain benefits to eliminate settlement delays and costly fees.
Anti-money laundering requirements and sanctions compliance are two of the biggest regulatory risks for public onchain bond issuances. Governments issuing tokenized bonds must also collect know-your-customer information to ensure funds reach proper recipients.
The tokenized U.S. Treasury market grew by over 50 times since 2024, according to data from analysis platform Token Terminal. The tokenized bond market could surge to $300 billion, according to a forecast from Lamine Brahimi, co-founder of enterprise digital asset firm Taurus SA.
Reduced settlement times, lower transaction costs, and asset fractionalization all expand investor access to the global financial system. These efficiencies democratize access for individuals who lack traditional banking infrastructure.
