The Republic of the Marshall Islands looks set to launch its own cryptocurrency, following comments from two senior government officials this week confirming the plans.
The country, a collection of 1,100 islands located in the Pacific and home to just 70,000 people, is poised to become the second country after Venezuela to launch a state-backed cryptocurrency.
Members of parliament passed a vote on proposals early this week, and while there is still room for rejection, local sources are confident the measures will pass into law.
The currency, called the Sovereign, is expected to launch later in 2018, should the proposals gain final approval. According to local lawmakers, the currency will debut with an initial coin offering with plans to make the Sovereign eligible for exchange trading.
Confirming the decision, Minister-in-Assistant to the President David Paul said the move was tactical, in light of the specific social issues facing the Marshall Islands, noting that the state-backed cryptocurrency “was specifically targeted for the long-term needs of the country.”
The move would be expected to raise significant revenue for the Marshall Islands. The funds raised are earmarked for providing health care for people affected by U.S. nuclear tests historically conducted in the vicinity.
Venezuela became the first country to release a state-backed cryptocurrency in the form of the controversial ‘petro’ token. The petro has already been launched in pre-issue, with the president of Venezuela, Nicolas Maduro, hailing up to $735 million in funding raised from the project to date.
However, political opponents and international observers are sceptical of the claims from Venezuela, and cite an ongoing lack of any evidence or blockchain transactions confirming any of the petro tokens have been issued or sold.
At present, the petro remains shrouded in uncertainty—the government themselves have offered contradictory information about how the token will work, and whether the token will run on ethereum or NEM blockchain infrastructure.
The Venezuelan petro was designed to as a proxy for state borrowing, as well as a mechanism for Venezuela to evade international economic sanctions. This has drawn strong condemnation, both at home and abroad, from governments and commentators alike.
With somewhat more noble objectives, the Marshall Islands cryptocurrency could therefore prove a more intriguing case study into how these types of proposals could work for other countries, with several other states thought to be considering similar plans.