The Marshall Islands government wants to introduce its own cryptocurrency, the "sovereign". This was published by the government of the dwarf state this week via social media. A bill to this effect was passed on Monday, so that the way is now clear for the island currency. After Turkey and Iran, the Pacific state is thus the third country to respond to the successful launch of Venezuelan petroleum by issuing its own currency.
First Petro, soon Sovereign? The list of countries with the hope of issuing a national cryptocurrency of their own in the future is growing by another member. The Sovereign, sovereign or ruler in German, is intended to promote the financial interests of the Marshall Islands in the future. A bill to this effect was adopted on Monday 26 February.
The purpose of this law is to declare and issue a digital decentralised currency based on blockchain technology as a public tender for the Republic of the Marshall Islands,"the bill states.
The good news spread the government of the dwarf state, which is one of the smallest countries in the world with only 72,000 inhabitants, via the state telegram account.
The fact that we are finally issuing our own currency and using it alongside the US dollar is a historic moment for our people. It is a further step towards realising our national freedom ",
said President Hilda Heine to Finance Magnates. The Marshall Islands do not have their own national currency. Due to its historical proximity and an association agreement with the USA, only US dollar notes are in circulation here. This is to be changed by the sovereign.
The technology behind the currency is said to come from the Israeli House. The start-up Neema wants to use public protocol data to keep the concern of criminal use as low as possible. In addition, accounts will be linked to the government's identification data, according to the Israeli tech news site CTech.
Marshall Islands: Tax haven in the South Seas
Similar to Venezuela, the publication of the sovereign is to take place in the course of an Initial Coin Offerings (ICO). The resulting financial injection is likely to be welcomed in the island state. In addition to declining tourism and manageable production of tropical fruits, the domestic economy is lagging behind.
The Marshall Islands government will invest the proceeds to advance its efforts against climate change, green energy, health care and those affected by US nuclear testing and education. The sovereign should be distributed directly to the citizens,"is how President Heine describes the project.
The difficult economic situation in the country is also related to the tax situation. The islands are regarded as a tax haven and are blacklisted by the EU Commission. Only the US compensation for the atomic bomb tests in the region literally keeps the islands, which are threatened by climate change, afloat. The USA sends up to 62.7 million US dollars to the Pacific Ocean each year.
The heirs of Petro
The Marshall Islands are not the first country to respond to the successful launch of Venezuelan petroleum sales last month with its own digital currency. Last week, for example, Turkey's governing party MHP published a proposal for the publication of its own Turkish cryptographic currency, the Turkcoin. Iran also wants to follow suit. Voices from the Iranian cabinet announced corresponding plans by the country's central bank.
The announcements prove it: Success creates imitators. In the eyes of many governments, state cryptocurrencies provide much sought-after answers to the questions and control needs posed by the digital payment alternatives of these days. They curb the fascination and above all direct their financial strength into their own budget. Once again, it only seems to be a matter of time before the next state will follow suit.