The Republic of the Marshall Islands (RMI), a small island nation in the central Pacific, has received a vital boost to its financial resilience through a new World Bank initiative designed to keep Pacific countries connected to the international banking system. The World Bank’s $68 million regional financing package (approved in mid-2025) aims to preserve and strengthen correspondent banking relationships (CBRs), which are increasingly under threat in the region.
CBRs allow local banks in small island states to access the global financial system—facilitating everything from cross-border remittances and trade payments to donor aid transfers and pension remittances. Over the past decade, however, major international banks have steadily withdrawn CBRs from Pacific nations, citing concerns about money laundering risks, high compliance costs, and low profitability. For countries like the Marshall Islands, which rely heavily on external financial flows, the erosion of these banking links has posed significant economic and humanitarian risks.
Without access to international payment systems, basic transactions like sending money to family members overseas, importing goods, or receiving development assistance become slow, expensive, or impossible. The Marshall Islands, where many citizens live and work in the United States under the Compact of Free Association (COFA), depends on steady remittance inflows and cross-border payments to support families and the economy.
The World Bank’s initiative will support regulatory improvements, enhanced anti-money laundering (AML) frameworks, and technical assistance to help Pacific financial institutions meet international standards. It will also fund payment system upgrades and digital infrastructure, ensuring that countries like the RMI can modernise their financial services while remaining plugged into the global banking architecture.
This move is timely and strategic. The Marshall Islands is already exploring blockchain-based digital currency solutions, including the proposed “SOV”—a legal tender cryptocurrency aimed at financial inclusion. But such innovations will only succeed alongside robust international financial connectivity.
With the new funding, the Marshall Islands is now better positioned to safeguard its financial sovereignty, improve banking access for its citizens, and maintain confidence among development partners and private investors. In an increasingly fragmented global finance environment, this is more than just a financial intervention: it’s a lifeline for economic stability and growth.
