The Marshall Islands is going forward with its plan to create its own cryptocurrency. It will be considered legal tender comparable to the U.S. dollar.
A small island in the Pacific is betting big on the cryptocurrency space, even planning on releasing its own blockchain-based asset.
The Sovereign (SOV)
The state-issued cryptocurrency will be called ‘Sovereign (SOV)’ and will have a fixed money supply. Inherently anti-inflationary, it will be capped at 24M tokens likely modeled after Bitcoin.
The country believes that the adoption of a digital currency will allow for the better monitoring of money transfers. Moreover, it will put an end to the “secrecy and anonymity loopholes” employed by cybercriminals, as said by the Marshallese government.
The SOV has been in development for some time, but its launch now seems imminent. Earlier this year, the Marshallese government began a non-profit organization dedicated to the SOV and funding it, called the ‘SOV Development Fund.’ Operating by mandate, it was to be responsible for supporting the new cryptocurrency at launch. The organization boasts a 7-person board three of whom are elected.
Mass Adoption Will Be Encouraged
Details about SOV usage are still to come, but the government is actively considering distributing the token through an initial coin offering. According to David Paul, minister-in-assistance to the president of the Marshall Islands, the hope is that the SOV will be used for everyday activities like paying taxes or groceries.
However, only established firms and banks approved by the Marshallese government will be able to use SOV. Individuals need to be verified as well if they wish to use the stablecoin. “Every individual using SOV must be identified by an approved verifier of their choice, such as a bank or an exchange,” Paul told reporters. It’s still unclear whether the SOV will trade on any exchanges as a stablecoin.
Given that many nations nowadays are actively considering their own state-backed cryptocurrencies, the plan for the SOV does not sound too far-fetched. If successful, it could soon serve as a model for other countries looking to do the same.
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