The Republic of Marshall Islands issued a blockchain-based national currency in an attempt to “finally gain financial independence in line with national values.”
The release of the cryptocurrency Marshallese Sovereign (SOV) was announced by Assistant to the President David Paul.
The Marshall Islands adopted the “Sovereign Currency Act” back in 2018, announcing its intention to issue a national digital currency. The country, which gained independence in 1979, still uses the US dollar as an official means of payment for all payments, payments, state taxes and fees.
In his report, Paul emphasized that the choice of the Isles in favor of issuing legal tender based on blockchain technology was based on the belief that centralized solutions cannot be viable in a country with a population of 50,000 people spread out over more than 1,000 Pacific islands .
In addition to decentralization, the blockchain offers the country the opportunity to comply with regulations, while maintaining the confidentiality of citizens. This technology, Paul notes, allows the state to automate most of its regulatory and control responsibilities, reducing the costs associated with existing systems, and thus help in the global fight against money laundering and terrorist financing.
Authorized companies, such as banks or exchanges, will be instructed to verify the identities of users of the new SOV cryptocurrency. However, the minister assures that the country will strive to protect the financial confidentiality of its citizens as much as possible: “It is extremely important that users can maintain their privacy, in particular, having the opportunity to choose when to disclose information, what exactly and with whom to share.” SOV will have limited emissions.
We decided to create a fixed money supply with a fixed growth, because paper currencies can be surprisingly unstable. […] The policies of large central banks are not encouraging, as the prices of gold and bitcoin show. Governments should be more thoughtful about money, and not consider it as a limitless resource.