Marshall Islands pave the way for their own cryptocurrency detached from the US dollar
An island nation located in the Pacific Ocean, with a population of approximately 75,000 inhabitants, makes its way into the cryptocurrency space.
The Marshall Islands are proceeding to create a national currency based on blockchain, the sovereign Marshall or SOV, the country’s government said in a statement. David Paul, the environment minister and minister of assistance of the president of the Republic of the Marshall Islands, spoke about the company at a conference in Singapore on Wednesday.
“With the blockchain technology implemented, we thought this was an opportune time to establish our own legal tender and reduce the country’s dependence on the dollar,” Paul argued in an interview outside the conference. He added: “As a small country, it will be easier and faster for us to make decisions and respond to the market as the digital currency is introduced.”
The country does not yet have an established start date, as officials must still resolve compliance and regulatory issues, as well as work with entities such as the United States Treasury and the International Monetary Fund, Paul said. In a February 2018 interview, he had told Bloomberg News that the plans were to issue the coin that same year.
The SOV has integrated compliance characteristics and its supply will grow at a fixed annual rate of 4%, according to the statement, which adds that only verified users will be able to make transactions in SOV.
The newly created SOV will automatically be sent to eligible holders, including all Marshalese citizens, who will also receive a fair percentage of 10% of the initial cryptocurrency supply, according to the statement. The SOV will not be one on one for the dollar: it will establish its own liquidity and be market based, Paul said in the interview.
The announcement comes when the idea of cryptocurrencies begins to gain strength. Facebook Inc. announced in June plans for a digital currency called Libra. The People’s Bank of China is “close” to launching its own cryptocurrency, a senior official said recently. Even Mark Carney, the governor of the Bank of England, raised the idea last month of a virtual global reserve currency similar to Libra.
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