“Since becoming an independent democratic nation in 1979, the Republic of the Marshall Islands has used the US dollar as money. Today we are progressing with our plan to issue a sovereign currency in digital form – using blockchain technology” said the Minister In-Assistance to the President and Environment.
The issuance of the Marshallese sovereign (SOV) was announced in an essay by The Honorable David Paul.
In 2018, the Marshall Islands passed a Sovereign Currency Act declaring its intent to release its new national digital currency. The nation, which has been independent since 1979, has until now been using the United States dollar as the official currency for all payments, debts, public charges, taxes and dues.
The state’s reliance on U.S. grants is estimated to total around $70 million each year.
Minister Paul, in his essay outlined that the Islands’ choice to issue a second legal tender based on blockchain technology was based on a conviction that centralized solutions are not workable in a country of 50,000 people.
Banks Will Verify Identity Of SOV Users
Approved entities such as banks or exchanges will be tasked with verifying the identity of SOV users.
Minister Paul argues that:
“We chose to create a fixed money supply with fixed growth because fiat currencies can be remarkably unstable. […] The policies of major central banks are not reassuring, as the gold and bitcoin prices attest. We as governments need to take a more sustainable approach to money, and not treat it as a limitless resource.”
The Minister in his essay about the Marshall Islands National Crypto said the the Island is working with international regulatory bodies to achieve this. He said:
“The Marshall Islands are working closely with international regulatory bodies to ensure SOV meets all compliance requirements and can be fully integrated into the international financial ecosystem. In fact, SOV is being digitally engineered from the ground up to prevent misuse, unlike paper currencies.”