The Marshall Islands is a small island nation with only 53,000 people and is located in the Pacific Ocean. Despite the fact that it is a distant, small nation, its new project might have a large impact on the future of cryptocurrencies over the entire world.
The Marshall Islands want their own cryptocurrency
The island became very interested in the ever-expanding world of cryptocurrencies. So much so, in fact, that they are planning to launch their own. Their new token is called Sovereign, or SOV, and businesses and citizens of the island will both use it.
The company that spearheaded this plan is from Israel, and it is called Neema. Barak Ben-Ezer, who serves as its CEO, brought the plan forward and was looking for sovereign nations that would be interested in adopting this new idea. When the idea was first presented to the island’s government, it was met with a curious mix of skepticism and interest. However, both the president Hilda Heine, as well as the Ministry of Finance were interested, so the whole plan managed to take off in a short time.
How will the plan work?
The currently used currency in this nation is still the US dollar, and the SOV is expected to coexist with it, according to David Paul, a Minister in assistance to the island’s President.
The future of this new currency is undecided, and it depends on how many businesses and people decide to use it. The tokens will come through an ICO. The plans include capping it at $24 million, and the sale is expected to start later in 2018.
Many expect that the SOV will quickly reach stability since the government will be backing it. This will be possible because of the Declaration and Issuance of the Sovereign Currency Act, which was passed by the government back in February. This is a big step for cryptocurrencies, but it is still contradictory since the very idea of cryptocurrencies was based initially on the need to remove it from the government and its influence.
Because of this, Ben-Ezer explained that the currency is decentralized and that the government won’t be able to control the supply of money. After the sale, the money supply will depend solely on the blockchain, according to him. He compared it to the old days when gold was the primary currency. The government couldn’t just “print” more gold if they wanted to increase the amount that is circulating. This currency is expected to work the same way.
According to Niklas Kossow, a Doctoral student from the Hertie School of Governance, Berlin, the involvement of the government might bring good to the industry. Trading will come out of the shadows, regulations will be applied, and security will be increased.
As for the blockchain, it is still under development, and once the crypto goes live, all of the transactions will be recorded on the blockchain.
The Islands’ image will be enhanced too
The Marshall Islands are not the first nation to attempt this feat. Venezuela also created Petro, and other countries, like Iran and Russia, have also considered similar actions.
Still, the Marshall Islands are not like these other countries. For example, they are not under sanctions from the United States. However, they do have a somewhat bad reputation for being a scene for multiple cases of money laundering, as well as a tax haven.
Minister Paul stated that they are well aware of these concerns and that the SOV was deliberately designed to be unusable in such acts. The very purchase of the tokens will require identification with a biometric marker and the ID from the government. Eventually, the purchase will be able to go through exchanges, but everyone will need to be in possession of an identity token to use the SOV.
That way, the money will only be able to travel between verified wallets, and this will be the crucial component in an attempt to prevent illegal activities.
Not only that, but the law enforcers will have the ability to request access to the funds that an individual has received, but only with official authorization. The info will be recorded on the blockchain, and there will not be a possibility of changing it.
Ben-Ezer believes that this will have a significant impact on the crypto world and that it might cause a chain reaction that will change the way the world looks on cryptos. Through all the measures taken by the planners, this cryptocurrency will now officially become money and will have to be recognized as such. How this will be received by other governments, businesses, and various agencies – remains to be seen.