Business

Paul How

Marshall Islands taps Swiss firm for sovereign crypto banknotes

The Republic of the Marshall Islands has procured the services of Swiss-based Tangem for the production of physical blockchain banknotes, to be used as the island nation’s official currency.

When issued, the sovereign (SOV) will be the world’s first decentralized digital national currency, not counting the Venezuelan Petro of course, and will be a second official legal tender in the island nation, alongside the U.S. Dollar.

Each banknote produced by Tangem will have a fixed amount of cryptocurrency, as stored in a chip. According to the smart banknote maker’s press release, transactions could be validated immediately, without fees and with no internet connection required. Furthermore, the Marshall Islands will not have to deal with the “technical infrastructure burden” of managing a blockchain, as these will all be handled by Tangem.

The blockchain firm’s co-founder Andrey Kurennykh said, “As the IMF [International Monetary Fund] has noted, the world is moving towards the widespread adoption of digital currencies, and we are excited to support the birth of the new global digital economy.”

Marshall Islands Minister-in-Assistance to the President David Paul said of the collaboration, “We are excited to bring in Tangem as another reputable and forward-thinking partner on our journey to create the world’s first sovereign digital currency… Tangem will help us ensure all citizens, including those living on more remote outer islands, are able to easily and practically transact using SOV.”

Tangem also produces blockchain-enabled smart card wallets for cryptocurrencies, stablecoins, tokens for initial coin offerings (ICOs) and tokenized asset offerings (TAOs), and other blockchain-based assets.

The Marshall Islands first announced its plan to issue a national digital currency in February 2018. The IMF cautioned the island country of risks that come with the plan, such as being isolated from international commerce and finance if the currency doesn’t take abroad.

The Swiss-based organization Bank for International Settlements (BIS) has released a report finding that 70% of 63 central banks are currently exploring the creation of a national digital currency. However, 85% said they were not likely to release one in the next three years, and only a small percentage said they were “very likely” to have one within six years.

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