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Sovereign Currency Act of 2018

Sovereign Currency Act of 2018 is a statute of the Legislature of the Marshall Islands which was passed on February 26, 2018. The Act creates and issues a digital decentralized currency (“cryptocurrency”) that will be used as the legal tender of the Republic of the Marshall Islands (RMI).[1][2]

Sovereign Currency Act of 2018

The Sovereign Currency Act of 2018 creates and issues the Sovereign (SOV) its own cryptocurrency. [3] This would lower the dependence on the USD.[4] There are plans for a portion of the cryptocurrency's revenue to go towards radiation-related health care needs following nuclear tests from 1946 to 1958.[5]

Implementation

The Sovereign cryptocurrency was created through a partnership with Neema, a financial technology startup.[3] Neema will use “Yokwe” protocol to ensure anonymity while also linking each account with a verified government identity that is both encrypted and private.[6] The SOV will be issued by the RMI’s Ministry of Finance and introduced through an initial coin offering (ICO) at a date yet to be announced. The number of SOV’s in circulation will start at 24 million and will grow by 4% each year.[7] RMI President Hilda C. Heine called the creation of SOV “another step of manifesting our national liberty.”[8]

Response

In September 2018, the International Monetary Fund (IMF) released a report warning the RMI not to launch its own cryptocurrency, the Sovereign, with primary concerns with cryptocurrency being a second form of legal tender, that the revenue from the ICO would be smaller than expected, and that proper governance on the cryptocurrency were not adequate. [9][10]

See Also

References

  1. ^ Madill, Chris (3 Mar 2018). "Ground Zero: Republic of Marshall Islands to Issue World's First Cryptocurrency as Legal Tender". BitRates. Retrieved 29 September 2018.
  2. ^ Ejukaan, Jepilpilin Ke (26 Feb 2018). "Declaration and Issuance of the Digital Sovereign Act 2018" (PDF). Nitijela: The Parliament of the Republic of the Marshall Islands. Retrieved 29 September 2018.
  3. ^ a b Chavez-Dreyfuss, Gertrude (28 Feb 2018). "Marshall Islands to issue own sovereign cryptocurrency". Reuters. Retrieved 29 September 2018.
  4. ^ Keane, Jonathan (23 Apr 2018). "Inside the Marshall Islands' plans to launch its own legal tender cryptocurrency". The Next Web. Retrieved 29 September 2018.
  5. ^ "No More USD? Marshall Islands Approves Official 'Sovereign' Cryptocurrency in 2018 With ICO". CCN. 28 Feb 2018. Retrieved 29 September 2018.
  6. ^ "Marshall Islands to issue legal cryptocurrency "Sovereign"". EconoTimes. 6 Mar 2018. Retrieved 29 September 2018.
  7. ^ "crypto that is real money". Sov. Retrieved 29 September 2018.
  8. ^ Custodio, Maricel (1 Mar 2018). "Marshall Islands Plans ICO For Sovereign Cryptocurrency". Block Tribune. Retrieved 29 September 2018.
  9. ^ Masnavi, Siamak (11 Sep 2018). "IMF Warns Marshall Islands Not to Launch Own Cryptocurrency As Legal Tender". CryptoGlobe. Retrieved 29 September 2018.
  10. ^ "Republic of the Marshall Islands: 2018 Article IV Consultation - Press Release; Staff Report; And Statement by the Executive Director for Republic of the Marshall Islands". International Monetary Fund. 18/270. Sep 2018. Retrieved 29 September 2018.