The Republic of the Marshall Islands has committed to the creation of a nationally backed cryptocurrency. The coin will behave like fiat money, and drive investors to the small country. The world will be watching to see how the coin fares, as others are likely to follow.
President Hilda C. Heine of the Republic of the Marshall Islands is proud to stand by the country’s decision to launch a sovereign backed cryptocurrency. Hein says that creating their new crypto is a step in manifesting national liberty, a watershed moment. The bill to establish the Sovereign (SOV) was passed on February 26 of this year.
R.M.I.’s new coin is also not under the same political scrutiny as the Venezuelan Petro, so its launch should be more seamless. The ICO is set for later 2018, with distribution to follow.
ICO and Neema
According to a report from Reuters, the supply of SOV will be capped at 24 million coins. This number is drawn from the 24 municipalities that make up the Marshall Islands. David Paul, minister-in-assistance to Pres. Heine, says that the country is making this move because they see cryptocurrency as the future of banking. He says that as a sovereign nation, they have the right and ability to offer legal tender in whatever form they choose.
Presales for SOV will begin in the next few months. The coin creation and distribution will be managed by Neema, a blockchain company out of Israel. The CEO of Neema is excited about this project, saying that this move from R.M.I. will quiet any naysayers about the crypto movement. Virtual currencies now have some clout; they are real money, with the added benefit of consumer choice concerning information disclosure.
More than just a coin
R.M.I has decided to use the new crypto in part of their budgetary solution. Currently, they rely heavily on US aid to make ends meet. They have projected to cut the need for aid in half by 2023, and the SOV will play a big part in that transition. Fifty percent of all funds raised by the ICO of SOV will be saved and allocated to a trust fund as well as some budgetary line items. To keep the users of SOV on the up and up, R.M.I. will require that investors and holders identify themselves on the blockchain using something they call the Yakwe Framework.
Precisely what are the budgetary issues that the SOV ICO will be covering?
From 1946 to 1958, the US used the Marshall Islands as nuclear testing grounds, and there are health impacts from those activities still in effect. 20% of the funds saved, then, are slated to go directly into health care and support funds for people with nuclear-related illnesses. Another 20% will go to citizens in the form of SOV.
This will be a small gift of money from the government- SOV and fiat money will be used in the same way. The last 10% of the 50% reserve will go to funding the Green Climate Fund, as the government seeks to usher in an age of greater environmental stewardship and responsibility. These are admirable aims for any government spending, so investors could be lining up to be part of the ICO.
All eyes on SOV
R.M.I. and Venezuela are not alone in their interest in cryptocurrency. Israel, Iran, and others have tossed the idea of a national backed virtual coin from time to time. The world is intrigued by this new technology. The SOV will be the first real nationally backed blockchain-based currency to see actual use.
The success or failure will determine a lot about the future of crypto markets. If the SOV works, it will be proof positive that blockchain-based currencies can work as legal tender. If the SOV falls flat, it will provide a lesson for other countries, but also cast some doubt about the viability of these coins as stable money.