The Republic of the Marshall Islands is proceeding with the creation of a blockchain-based national currency, reportedly called the Marshallese sovereign or SOV.
David Paul, Environment Minister and Minister-in-Assistance to the President of the Marshall Islands, spoke about the project at the Invest: Asia cryptocurrency conference held in Singapore on September 11th.
The national virtual currency will be introduced through a token sale in a Timed Release Monetary Issuance (TRMI) before commencing use in the Pacific island nation. The units sold during this phase will be exchangeable for the Marshallese sovereign after the actual crypto is officially released.
Backed by the government, SOV will be built on a specially developed blockchain platform. With its built-in compliance features, its supply will consistently expand at a fixed rate.
The Marshall Islands is currently using the US dollar as its currency. The dollar will remain in use once SOV has launched, but the Marshallese sovereign will become the national legal tender.
The Pacific island nation has been facing logistical challenges, such as remittance costs as high as 10% per transaction, transport difficulties due to the country’s remote geography, a lack of international banking relationships and monetary policy options.
However, Minister Paul said, “Blockchain changes everything.”
“Blockchain won’t just let us create our own money for the first time — the sovereign is a new kind of money, one which enshrines our Marshallese values,” he added.
He also emphasized that SOV offers more security than conventional currencies and that it lessens the compliance burden for small nations.
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