The Republic of the Marshall Islands (RMI) has said it is the first country in the world to recognize a cryptocurrency as its legal tender. Once issued, the Sovereign (SOV) will join the US dollar as their official legal tender. They are working in collaboration with Israeli startup, Neema who are developing the underlying technology.
The partnership means they are working together to wade through a multitude of US regulatory concerns as well as expediting the technological and logistical side of issuing the SOV using blockchain technology.
The International Monetary Fund (IMF) has expressed reservations, saying that a national cryptocurrency will “increase macroeconomic and financial integrity risks, and elevate the risk of losing the last U.S. dollar correspondent banking relationship.” They threatened that if the RMI launches the cryptocurrency there is a risk that many countries might stop giving much needed financial aid.
However, the country is creating the digital currency in order to raise money to pay bills and boost the economy. They hope to raise $30 million of which half will go to Neema, which has caused some concern with some government officials.
Islanders Still Suffering Effects From Nuclear Bomb Tests Carried Out By The US
RMI sees the SOV as a way to detach itself from its dependence on the US Dollar. The country has struggled with US relations after the damage caused to its people by nuclear bomb tests carried out on the archipelago between 1946 and 1958. The US carried out 67 nuclear weapons tests at Bikini and Enewetak atolls in the Marshall Islands, including the Bravo Test, the single largest above ground nuclear detonation the US ever conducted. Many of the islanders continue to seek justice as well as healthcare, for being used as human test subjects.
The island’s President, Hilda Heine has said that they will allocate SOV directly to citizens which will “circulate the currency and distribute wealth efficiently”. She added that there will be investment to support “climate change efforts, green energy, and healthcare for those still affected by the US nuclear tests, and education”.
“This is a historic moment for our people, finally issuing and using our own currency, alongside the US Dollar,” she said. “It is another step of manifesting our national liberty”.
The SOV will require users to identify themselves, thereby sidestepping the anonymity that many cryptocurrencies offer and that governments believe leads to money laundering and other illicit uses.