The Marshall Islands, following in the footsteps of Venezuela, is the latest country to begin development of its own national cryptocurrency. The digital currency name is Sovereign (SOV) and is expected to be launched by Ben Ezer in 2019. The RMI Government partnered with the Israeli fintech company Neema for the implementation of the SOV initiative. Barak Ben – Ezer, the CEO of Neema told the media: “This Sovereign cryptocurrency is totally decentralized and the government cannot control its supply of money. They have no control over the currency after [crowd sale].”
Although this is good news for crypto users in the country, they must go the extra miles to get US approval.
The Marshall Islands currently use the U.S. dollar as their official currency and are “highly dependent on receiving and spending U.S. grants,” totaling approximately $70 million in assistance annually, in accordance with the compact. The SOV will circulate alongside the dollar once it has been issued, so the Marshall Islands will have two coexisting legal tenders “for all debts, public charges, taxes, and duties.”
Regulators from the USA are reportedly concerned about the impact of the coin launch on banks there as well as the crime rate since the Sovereign is at risk of money laundering.
The Marshall Islands claims that it is the first country ever to accept cryptocurrency in a national legal tender. This week it passed a key bill for the creation of SOV. The plans had been hotly debated by leaders of the Marshall Islands for days, according to reports from the Haaretz publication.
The Sovereign was first introduced in February of 2018 when the Marshall Islands parliament passed a law that declared its new national digital currency to be published via an initial Coin Offering (ICO). Some cash raised from the ICO is supposed to go to health care for the approximately 53,000 citizens of the country who have fallen victim in the past to the consequences of U.S. nuclear testing.
The idea behind the SOV project lies in the pursuit of “manifesting our [ the RMI’s ] national freedom” by the RMI government, as well as the creation of an alternative state currency to the U.S. dollar used by the small island nation.
The path for adapting to the Sovereign as their digital currency was not simple. The International Monetary Fund, the Department of the US Treasury and even bank officers on the Marshall Island themselves have criticized the Sovereign Coin.
In spite of this, Ezer says, the coin is one of the safest to use in the world if launched. One reason, he says, is that all token users will be identified and their activities will be checked by the U.S. Foreign Asset Control Office “so that the SOV is available only to legitimate and legal people.”
The Times of Israel reports that Neema continues to work on technology and logistics and to respond to US regulatory concerns.
When asked about the launch of SOV, Ben Ezer said, “We are working days and nights to prepare the foundations for the initial SOV coin offering, and are aiming to launch once there is positive momentum in the market.”