Business

Erik Gibbs

Marshall Islands pushes forward with digital currency plan

The Sovereign is safe. The Marshall Islands has been dreaming of introducing a state-backed cryptocurrency called the Sovereign since this past March and the hopes were almost eliminated after a small number of lawmakers in the country’s Parliaments had tried to oust the country’s president, Hilda Heine, over the move. Heine is still in charge after a failed no-confidence vote and the country will now move forward with its plan.

Parliament voted straight down the middle – 16 to 16 – to remove Heine and, absent a tie-breaker, she cannot be removed. The opponents, driven more by their desire for power than actual concern over the Sovereign, were not able to pull off their coup.

Now that the vote has come and gone, Heine and the Finance Ministry will move forward with the Sovereign. If accepted, the Sovereign will become the official tender of the country, possible replacing the U.S. dollar, which currently holds the title. It is also possible that both could be recognized as legal tender and used simultaneously.

The International Monetary Fund (IMF) has previously cautioned the nation that moving forward with the state-backed crypto was not advisable, as it ran the risk of forcing some international partners to decide to cut off relations. It’s interesting that the IMF would take that position, given that it only just recently asserted that state-backed cryptocurrencies have significant merit.

Heine has said that the introduction of the Sovereign would be an “historic moment for our people, finally issuing and using our own currency. [It] is another step of manifesting our national liberty.”

It won’t be historic for just the Marshall Islands – it would be one for the entire cryptocurrency ecosystem.

The plan is reportedly being supported and implemented by Israeli startup Neema. It has created the program and has also designed an initial coin offering (ICO) to see the launch of Sovereign that, according to the company, will provide the country with a $30-million windfall.

The deal isn’t completely ready to take off yet. For the Sovereign to really gain its rightful place, it has to meet requirements established by Europe and the U.S. Additionally, the IMF will have to give it the thumbs-up, as well. Given the IMF’s previous comments, that approval won’t come easy.

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