The Marshall Islands has pushed ahead with issuing its own legal cryptocurrency, the Sovereign (SOV), which will be circulated along with the USD. The effort constitutes the first legal crypto tender that a country has implemented, with the Pacific island nation distributing SOV directly to its citizenry.
The launch of the SOV followed a lengthy legal process and discussion in the country. With a population of just over 53,000, the launch of the SOV will reflect an interesting case study for other countries pursuing domestic crypto tenders of their own. Of note, the SOV will now reflect a parallel medium of exchange within the Marshall Islands, together with the USD.
Hilda C. Heine, President of the Marshall Islands (RMI), commented on the launch: “This is a historic moment for our people, finally issuing and using our own currency, alongside the USD. It is another step of manifesting our national liberty.”
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Moving forward, the SOV will be distributed to the public through an initial coin offering (ICO). “The RMI will invest the revenues to support its climate change efforts, green energy, healthcare for those still affected by the US nuclear tests, and education. In addition, SOV units will be directly distributed to citizens,” she added.
The SOV is based on ‘Yokwe framework’, which mandates users to identify vis-a-vis the blockchain. This also will help solve the anonymity problem that has hurt other cryptos such as Bitcoin, which has handicapped adoption levels.
In particular, this new framework allows SOV users to provide basic information to financial institutions – i.e. who are you, and what is the source of your funds? The country will also be allowing global investors to participate in an SOV ICO as well, though only residents of the Marshall Islands will receive a free allocation of the currency.
The SOV represents the first step of a broader vision to help foster a more blockchain-oriented economy. This includes the rollout of cryptocurrency and biometric IDs securely recorded on the blockchain.
“The Marshall Islands is the first nation to adopt a transparent crypto monetary system, and we are proud of it. We are making our economy more resilient and payments more transparent,” reiterated the RMI’s Minister David Paul, Minister in Assistance to the President.